China has squeaked past Britain by the tiniest of margins to become the world's fourth-largest economy, according to the World Bank's latest calculations.
The World Bank said that by its official measure China produced US$2.263825 trillion in output in 2005, just US$94 million, or 0.004 per cent, more than Britain.
China comfortably overtook Britain last year based on each country's gross domestic product converted into US dollars at current exchange rates.
But the World Bank's widely watched ranking measures gross national income converted into dollars using the "Atlas" method of currency conversion, which smoothes out exchange rate fluctuations by using a three-year average.
Gross national income comprises gross domestic product plus net inflows of income such as rents, profits and salaries from abroad.
The United States, Japan and Germany remain the world's first-, second- and third-largest economies respectively, according to the bank, which posted its 2005 rankings on its website over the weekend.
"In terms of quality, there is still a whopping gap between China's economy and Britain's and those of developed countries as a whole," said Han Meng, an economist with the Institute of Economics at the Chinese Academy of Social Sciences.
"We should remain cool-headed and be aware that there is tremendous room for China to improve in its economic growth model and structure," he said.
He noted that in areas such as technological prowess, management expertise, industrialization and urbanization, China is still playing catch up with other developed countries.
Li Yongsen, an economist with the Renmin University of China, said that in per capita term, China is still years away from Britain and other developed countries.
"We should pay more attention to economic growth quality, making sure that this breakneck growth does not come at the expense of energy and the environment," he said.
China said on December 20, 2005 that its economy was far bigger than previously estimated.
It revised its economic data after a year-long nationwide economic census uncovered about US$280 billion in hidden economic output in 2004. The amount is roughly equivalent to an economy the size of Turkey or Indonesia, or 40 per cent of India's economy.
That means that China's gross domestic product in 2004 was nearly US$2 trillion, not the US$1.65 trillion previously reported. With its GDP up 17 per cent, China was the sixth-largest economy in the world last year.
The new figures provide good news for China, economists say, suggesting that the country's economy is healthier, more diversified and more capable of sustaining growth than previously believed.
China Daily - Agencies
(China Daily 07/04/2006 page1)