China's economy seen much bigger

updated 11:56 a.m. ET Dec. 20, 2005

BEIJING - China said Tuesday its economy is much bigger and less export-dependent than previously reported, issuing new data that analysts said may ease fears its roaring growth is unsustainable — and encourage even more foreign investment.

A new survey of China's economy boosted its official output for 2004 by 16.8 percent by taking into account emerging service businesses, a previously underreported sector, the government said.

It said services' share of the economy rose sharply, while that of manufacturing fell.

The results show mainland China replacing Italy as the world's 6th-largest economy, trailing Britain and France.

China would jump to No. 4, behind the United States, Japan and Germany, if it added in its territory of Hong Kong, which reports economic figures separately.

The figures mean China's export and investment rates are smaller as a percentage of the total economy — possibly easing fears that they were unsustainably high — analysts said.

"The Chinese economic miracle will look less like a miracle and more like a normal country," said Steve Tsang, director of the Asian Studies Center at St. Antony's College at Britain's Oxford University.

"It would mean the economy's ability to continue at the current rate of growth is better," Tsang said.

The figures were released by the National Bureau of Statistics, which said it surveyed 30 million businesses, including restaurants, karaoke bars and others in booming service industries.

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