News Digest: All-Consuming GDP Growth

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Chinas 3rd quarter growth hit 9.4 percent, and full-year growth is expected to be in the range of 9.3 to 9.4 percent. This strong growth is expected to continue into 2006, with new estimates ranging from 8.5 to 9 percent.

While the headline figures remain the focus, it is important to note that domestic demand is expected to play an increasingly important role in future GDP growth. Credit Suisse First Boston estimates that the Chinese consumer market will grow by 18 percent a year, and that by 2014 Chinas consumer market will be second only to the US.

The emergence of domestic consumption as a major force will assist in reducing the reliance on export sales as a driver for growth – and the associated high trade surpluses. Over time it is hoped that this trend will help reduce tensions with Chinas major trade partners such as the EU and the US.

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