MercoPress. South Atlantic News Agency

Guess which is the world's fourth largest economy?

China which has the fastest growing among large economies reviewed the estimate of its GDP by 16.8%, overtaking Italy as the world's sixth economy. The review follows a national census and is measured in US dollars at market exchange rates.

However experts relieve that given current rates of growth and capital movements, China actually ranks fourth behind US, Japan and Germany and ahead of United Kingdom and France.

The one year long census involving 13 million pollsters, one for each 100 Chinese, emphasized on the under rated services sector and soaring private companies. The new information also comes as a relief for many bankers and investors concerned with the Chinese economy's investment ratio and outstanding overdue credit, which now seem more long term sustainable.

"The revised statistics shows that China's economic structure is more reasonable and healthy than previous data", said Li Deshui, chief of the Statistics Office. "The Office now estimates that GDP in 2004 was 15.9 trillion yuan, 16.8% higher". Using the exchange rat of 8.276 yuan to the US dollar that amounts to 1.93 trillion US dollars compared to Italy's 1.67 trillion US dollars according to the World Bank.

Fast growing sectors such as telecommunications, retailing and real estate made up 93% of the review which thrust the services sector participation from 31.9% to 40.7% in 2004. Industry's share on the other hand dropped from 52.9% to 46.2% while agriculture and fisheries also decreased to 13.1% from 15.2%.

The additional good news is that China is less dependent on industrial production, --and constant growing demand of energy and commodities--, to keep the sustained 9% expansion rate of the last three years.

"Since the services sector is larger that originally estimated China's growth sustainability is much better than what was generally believed", said Frank Gong from JP Morgan Chase in Hong Kong, adding that since officials are now aware that Chinese growth is less dependent on export oriented industries, "they could be more relaxed regarding the possibility of a stronger yuan, privileging consumption and services".

Furthermore it will ease concerns at the Central Bank regarding a stronger yuan, "because China undoubtedly is now the world's fourth largest economy", indicated Jim Walker from CLSA Hong Kong.

But success also generates new scenarios and this could mean even stronger pressures from the US Congress for a quick appreciation of the Chinese currency, including a bill presented by Senator Charles Schumer demanding a 27.5% tariff on all Chinese imports conditioned to a "more realistic exchange rate".