China's economy expands by 9.9%

SHANGHAI -- China's economy expanded by a stunning 9.9 percent in 2005, according to data released yesterday, which suggests it may now rank as the fourth-biggest in the world.

Spurred by strong exports and foreign investment, growth in the fourth quarter was also up 9.9 percent from the same period a year earlier. For 2005, China's gross domestic product totaled $2.26 trillion, the National Bureau of Statistics said.

According to recent estimates, that would make China's economy the fourth-largest in the world, behind the United States, Japan, and Germany.

The economy is showing hardly any signs of slowing down, despite efforts by the communist leadership to curb excessive investments in construction and redundant factories that have strained transport networks and supplies of energy and other resources.

Growth in 2004 was 10.1 percent -- a figure recently revised from 9.5 percent, based on an economic census that uncovered much larger than expected growth in the services sector.

Chinese economic data are notoriously unreliable, and some economists questioned whether the figures understate real growth, given a nearly 30 percent surge in exports and strong domestic spending. The 9.9 percent figure ''doesn't quite capture it," said Stephen Green, senior economist at Standard Chartered Bank. ''One could say that 9.9 percent is a very convenient number; it's not 10 percent. Ten percent might scare people, and might create more trade friction with the US."

While many other countries have yet to release 2005 GDP figures, according to the most recent figures available and projections for the year, China's economy is now bigger than those of Britain, France, and Italy.

The economy has consistently overshot official targets for the past several years. Perhaps partly for that reason, officials did not offer forecasts for 2006. Government economists earlier offered predictions of between 8.5 and 9 percent for this year, a range in line with estimates by the World Bank and many private economists.

The consumer price index, China's main gauge of inflation, rose a mere 1.8 percent last year.