London, January 15:

China has overtaken Germany to become the world’s third-largest economy earlier than expected, after estimates for the country’s gross domestic product (GDP) were revised higher. The National Bureau of Statistics of China reported this morning it now believes the Chinese economy grew by 13 per cent in 2007, up from an earlier estimate of 11.9 per cent and China’s highest annual growth rate since 1993.

Applying the revision to previous calculations carried out by the World Bank shows that China’s gross national income reached $3.218 trillion in 2007, compared with $3.197 trillion for Germany.

Economists were already confident that China overtook Germany during 2008, but it now seems that the change occurred in a year earlier. China took fourth place from Britain in 2005, and now has Japan and the US in its sights.

China’s rapid economic growth began to tail off last year, as the manufacturing powerhouse felt the impact of the woes sweeping the global economy. GDP growth fell to nine per cent in the third quarter of 2008, down from 10.1 per cent in the second quarter and the fifth straight quarter of slowing growth.

Before this latest revision, analysts had predicted that Chinese economy would grow by around 7.9 per cent in 2009 — this compares to the UK where the recession could slice two per cent off GDP.