ESCAP predicted in its Economic and Social Survey of Asia and the Pacific 2006, which was publicised on March 30, that robust growth in China has been sustained by three broad factors: surging net exports, domestic investment and, increasingly, domestic consumption.

The survey said that China's export growth is expected to taper off slightly in 2006. Electronics exports are likely to maintain their recovery, which began late in 2005. Textile and clothing exports will be constrained by limits agreed with the United States and the European Union.

According to the survey, the 2.1 percent revaluation of renminbi against US dollar last year could theoretically hurt China's exports, employment and GDP growth, but any negative impact is likely to be negligible in view of the strong competitive advantage China enjoys.

Owing to China's progressively market-based financial system and the increased autonomy enjoyed by companies and local authorities, investment demand, whether for real estate or manufacturing, could continue to increase in 2006 despite administrative controls, said the survey.

China's industrial sector has undergone a massive transformation in the recent past.