China economy may grow 4 times faster than EU, Japan
(Bloomberg)
Updated: 2005-12-30 16:09

Electronics, Textiles

China's trade surplus is on course to triple to a record $100 billion this year on surging exports of electronics and textiles. UBS estimates net exports accounted for more than a quarter of economic growth in 2005, a contribution that may turn negative by 2007 as the trade surplus narrows. The bank estimates the gap will shrink to $92.8 billion in 2006 and $61 billion in 2007 as import growth accelerates.

"The real story next year will be a recovery in domestic demand," said Anderson, chief Asia economist at the investment bank in Hong Kong. "Retail sales are as strong as ever, imports are rising and although the government is cracking down on excess capacity in overheated sectors, it's also encouraging investment in a whole range of areas including transport and infrastructure."

Investment will continue to be the main driver of growth in 2006 as infrastructure spending increases and projects already under construction are built out, Yao Jingyuan, chief economist at the National Bureau of Statistics said on Dec. 22. He forecast fixed-asset investment will rise by about 20 percent next year from about 27 percent in 2005.