China: the World Should Be Put On Notice

Projecting growth in real GDP at a rate of 7.5% for 2003 as a whole Stephen Roach argues that the world should be put on notice: China is now coming of age.

There can be little doubt that China is now coming of age. While still a relatively small economy, China growth is now strong enough to have a major impact on the dynamics of the broader global economy. Currently, China accounts for only about 4% of a $32 trillion world economy. However, in a weakened global climate, China’s growth rate is now strong enough to have accounted for fully 17.5% of the growth in world GDP in 2002 -- second only to the growth contribution of the United States. At the same time, while China accounts for only about 5% of the world’s total manufacturing exports, it accounted for 29% of last year’s growth in such trade. In short, China is now making a highly disproportionate contribution to the growth dynamic of a sluggish world economy. That has put the world on notice that China’s global impact now needs to be taken quite seriously.
Source: Morgan Stanley Global Economic Forum
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