S Korean economy disappoints, but China bullish

The latest report from the Bank of Korea shows that South Korea's economy grew 4.6 Percent in 2004. This is less than expected, pulled down by weak private spending.

South Korea appears to be just another one of the Asian economies that seem to be growing slower than expected. In contrast, the US economy continues to be strong, to the surprise of many economists. What accounts for the differing fortunes? Private consumption. Private consumption has proven to be surprisingly resilient in the US, while it has been disappointing in many Asian economies.

One Asian economy that may not need to rely on strong private consumption is China's. The country's Development Research Center of the State Council has issued a forecast that the Chinese economy will grow by up to 8 percent annually for the next five years.

"Calculated according to constant prices of the year 2000, China's Gross Domestic Product (GDP) would reach around 2.3 trillion dollars at the end of 2010. The per capita GDP would reach around 1,700 dollars," the report, cited by Xinhua news agency, said.

From 2010 to 2020, China's annual GDP growth rate would slow slightly to around 7.0 percent on average.

The major driver of growth in the period from 2006 to 2020 will be rapid capital formation, which will contribute between 60 to 70 percent of economic growth.