China's economy grows, but it's not without woes

On the surface, the news of China surpassing Germany as the world's third largest economy seems great.  According to China's National Bureau of Statistics China's economy grew a staggering 13% in 2007, surpassing the 11.9% that officials previously reported.

Of course, considering the economic situation during 2008, the news of this economic growth is a bit bittersweet.  China's projected growth during this year was about 9.6%, but with this revised growth rate for 2007, the figures for 2008 will probably be lower than expected.

As a result, China's economic slowdown in 2008 might actually be worse than the original estimates. 

At the moment, economists predict that China's GDP growth rate will slow to about 8% this year, and 7.5% in 2010.  For most countries, 8% GDP growth rate would be remarkable, but it might not be enough to keep up with the growing demand for jobs. Additionally, China's exports market continues to fall.

In November exports dropped 2.8% from the previous year, and December exports were down 2.2%.  These figures don't seem too devastating, but compared to last January's 26.8% export growth rate, there's been a major shift.  Not surprisingly, most exporters don't feel especially optimistic about prospects for 2009.

Despite the low expectations, China's economy could still surpass Japan's by 2010, becoming the second largest after the U.S.