China has squeaked past Britain by the tiniest of margins to
become the world's fourth-largest economy, according to the World
Bank's latest calculations.
The World Bank said that by its official measure China produced
US$2.263825 trillion in output in 2005, just US$94 million, or
0.004 percent, more than Britain.
China comfortably overtook Britain last year based on each
country's gross domestic product converted into US dollars at
current exchange rates.
But the World Bank's widely watched ranking measures gross
national income converted into dollars using the "Atlas" method of
currency conversion, which smoothes out exchange rate fluctuations
by using a three-year average.
Gross national income comprises gross domestic product plus net
inflows of income such as rents, profits and salaries from
abroad.
The United States, Japan and Germany remain the world's first-,
second- and third-largest economies respectively, according to the
bank, which posted its 2005 rankings on its website over the
weekend.
"In terms of quality, there is still a whopping gap between
China's economy and Britain's and those of developed countries as a
whole," said Han Meng, an economist with the Institute of Economics
at the Chinese Academy of Social Sciences.
"We should remain cool-headed and be aware that there is
tremendous room for China to improve in its economic growth model
and structure," he said.
He noted that in areas such as technological prowess, management
expertise, industrialization and urbanization, China is still
playing catch up with other developed countries.
Li Yongsen, an economist with the Renmin University of China,
said that in per capita term, China is still years away from
Britain and other developed countries.
"We should pay more attention to economic growth quality, making
sure that this breakneck growth does not come at the expense of
energy and the environment," he said.
China said on December 20, 2005 that its economy was far bigger
than previously estimated.
It revised its economic data after a year-long nationwide
economic census uncovered about US$280 billion in hidden economic
output in 2004. The amount is roughly equivalent to an economy the
size of Turkey or Indonesia, or 40 percent of India's
economy.?
That means that China's gross domestic product in 2004 was nearly
US$2 trillion, not the US$1.65 trillion previously reported. With
its GDP up 17 percent, China was the sixth-largest economy in the
world last year.
The new figures provide good news for China, economists say,
suggesting that the country's economy is healthier, more
diversified and more capable of sustaining growth than previously
believed.
(China Daily July 4, 2006)