China poised to become world’s second largest economy after revising 2008 growth figures

China, currently the world's third largest economy, revised its 2008 growth estimate, raising it from 9 per cent to 9.6 per cent yesterday, and poised to overtake Japan as the world's second-largest economy sooner than previously estimated.

China's National Bureau of Statistics (NBS) yesterday that the country's gross domestic product (GDP) grew 9.6 per cent in 2008, up 0.6 per cent from previous estimates, mainly because of the service sector, which was bigger than originally estimated.

The new figures reveal that China's 2008 GDP was 31.405 trillion yuan (nearly $4.6 trillion), which is about 4.5 per cent larger than the previous estimate of 30.067 trillion yuan.

China is looking at a growth of nearly 8 per cent this year and in 2010, which would help it to overtake Japan in 2010 and catapult it as the world's second largest economy, behind the US.

According to the International Monetary Fund, Japan's economy is estimated to reach $5.19 trillion next year, while China's economy may reach $5.5 trillion, displacing Japan from the second slot.

The NBS said that the service sector's contribution was larger than previously thought and has contributed 13.1 trillion yuan in against earlier estimates were 12 trillion yuan. The revised figures show that the service sector accounted for 41.8 per cent of China's GDP, compared with the earlier estimate of 40.1 per cent.