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Tuesday, December 20, 2005

China's Economy is Bigger Than Previously Thought

Apparently China's economy is bigger than previously tracked.

Announcing the results of the census, the National Bureau of Statistics said on Tuesday it now estimated gross domestic product in 2004 totaled 15.99 trillion yuan, an increase of 16.8 percent from the previous total of 13.65 trillion.

"The revised statistics show that China's economic structure is more reasonable and healthy than the previous figures showed," Li Deshui, the head of the National Bureau of Statistics, told a news conference...

With a stroke of the pen, the revisions lift China above Italy into sixth place in the world economic rankings based on 2004 output.

At the exchange rate of 8.2765 yuan per dollar that obtained at the end of 2004, China's revised dollar GDP was $1.93 trillion last year compared with $1.67 trillion for Italy, according to World Bank figures.

What's more, based on exchange rate movements and relative growth rates in 2005, economists calculate that China by now has risen to fourth place, ahead of France and Britain, and is now dwarfed only by the United States, Japan and Germany.

Remember the former BJP finance minister Mr. Jaswant Singh sneering at the 9 to 10% growth of Chinese economy year after year concluding that they may be fudging the growth rates. Current Congress I folks in charge aren't being so childish. But they aren't really doing much to take the economy to the next level from the 6-7% growth.

In fact, as a casual observer of the state of Indian economic policies, Ms. Tavleen Singh, columnist at IE,
notes the Mr. Chidambaram and PM Singh speak as though they are outsiders advising the government instead of talking charge and getting things done. Two years have been wasted with just talk and no action. We can expect three more years of the same. In the mean time, other important economies of the world are moving on with good economic policies, much better infrastructure, by promoting innovation, and growing their economies. India's middle class and poor deserve better than bunch of talking heads in charge of Indian economy.