The Chinese government announced that its economy, the fastest growing in the world, is larger than it had previously reported. China announced that its GDP was nearly $2 trillion in 2004, not $1.6 trillion.

The numbers, based on a nationwide survey, suggest that China’s economy is less reliant on investment and more driven by national consumption than previously thought.

China is now set to leapfrog over both the UK and France to become the world’s fourth largest economy (even at its current, undervalued exchange rate). The revision itself is the size of an economy such as Indonesia or Turkey.

In addition, China’s central bank’s research bureau raised its gross domestic product growth estimate for 2005 from 9.2% to 9.4%.

Source: The Financial Times; The New York Times