China is the place to be, but it may not be the end of the rainbow that companies were prophesising before it became a full-fledged member of the World Trade Organisation (WTO).

That was the message from speakers at the Chamber's China Business Conference, on November 5, which included Mainland officials, Hong Kong and Mainland entrepreneurs and academics.

While the global economy is still struggling to find a way out of the doldrums, "China is like an oasis in the desert," Dr Liu Jinbao, vice chairman & chief executive, Bank of China (Hong Kong) Ltd, told the audience during his opening remarks.

The Mainland's gross domestic product grew 7.9 per cent for the first three-quarters of this year, and could well reach the 8 per cent mark by the end of the year.

Dr Liu attributes three main driving forces behind China's growth. The first is its huge export power. For the first three-quarters of 2002, China exported US$232 billion worth of goods, up 19.4 per cent year on year.

Much of this growth is being driven by foreign direct investment (FDI) in the country, which has so far grown 22.4 per cent this year to reach year on year US$41.8 billion. "Global deflation is accelerating exports as manufacturers move to China to take advantage of its abundant, cheap labour. As a result, exports from foreign investors are up 23.9 per cent, but these companies are also targeting China's huge domestic market," he said.

The third growth factor is government spending. For the first nine months of this year, government spending on infrastructure projects was up 24.7 per cent, he said.

Looking ahead, he forecasts that China's economy will grow even faster as the world economy starts to regain steam and consumer confidence bounces back. "In the next five years, average growth may reach 7.5 per cent. Should the global economy make a cyclical upturn our estimates may even prove to be too pessimistic," he said.