IMF says China has become third-largest economy

BOOMING economic growth has transformed China into the world's third-largest economy, according to forthcoming figures prepared by the International Monetary Fund.

The IMF's full version of its latest World Economic Outlook, out soon, shows that China now accounts for 6 per cent of world output, three times larger than the country's previous weight in the world economy.

The IMF, which bases its estimate of national shares of total global output on those goods and services purchased for the same amount of money in different economies, believes that the US takes 22.5 per cent of world output. Previously, the fund used a measure of output converted from local currencies into dollars.

Next is Japan, which accounts for 7.6 per cent, while China has now nudged Germany into fourth place, with 4.3 per cent. India has claimed fifth place, while Mexico and Brazil both outstrip Canada, the smallest economy in the Group of Seven. The IMF puts Britain's share at 3.5 per cent, level-pegging with France and above Italy, which takes 3.4 per cent.

IMF figures also show that the industrial world accounts for 54.4 per cent, a sharp contraction since the end of the Second World War, when the US economy was thought to account for half world output.

Developing countries account for 34 per cent, while the countries of the former Soviet Union and Eastern Europe take up 11.2 per cent.