An economic slowdown on the mainland this year would not significantly affect the regional or world economies, research by BNP Paribas shows. The French-based bank's report said the mainland's role in the global market had been greatly exaggerated. Even Hong Kong and Taiwan, the mainland's closest trading partners, should not fear potential fallout from a slowdown because their economic dependence on Beijing had been overestimated, said Andrew Freris, the bank's chief economist for the Asia-Pacific region. His research findings showed the mainland's gross domestic product accounted for only about 2 per cent of the global economy between 2001 and 2003. The BNP study found the mainland's share of the global economy was more than 10 percentage points less than estimates based on purchasing power parity. The theory of purchasing power parity is commonly used in comparing living standards between countries. It states that prices of identical goods anywhere in the world should be equal after adjusting for the rate of exchange between currencies. The mainland's share of world trade last year stood at a modest 6 per cent of exports and 5.5 per cent of imports. Mr Freris said there had been a distortion of the country's importance to world economic growth since 2001. 'One does not diminish the fantastic achievement of China by saying that China is still a small potato in the global economy,' Mr Freris said. 'Growth of exports from China contributed a lot to the growth of global trade - as much as 20 per cent. [But] there has been confusion between the contribution that China has made to growth of world trade and [the] percentage which China itself accounts for in the total of global trade.' Mr Freris said the mainland economy was not in a general state of overheating.
