China's expansion accelerated towards the end of the year, data yesterday revealed, up 10.7 per cent in the final quarter on the same period a year earlier. In comparison, Japan's economy is widely expected to have contracted by 6 per cent when it reports its final-quarter GDP figures next month.
China has come up with a "very smart policy stimulus" during the recession, said Goldman Sachs chief economist Jim O'Neill. "They have replaced exports with domestic demand, both consumption and investment … China has become more important as America (has become] less, which is what the world needs," he said.
China also benefited from an aggressive government-driven stimulus policy, quickly enacted in November 2008. However, Michael Pettis, at Peking University, said there was a "real concern about the quality of the growth and what will happen when that stimulus is withdrawn".