The analysts said that the concern of some Asian countries that the rapid growth of China after its WTO entry will grab opportunities from neighbouring countries is ungrounded.

The key for all Asian countries who want to benefit from China's WTO entry is restructuring, they added.

Donald Hanna, SSB's Hong Kong-based analyst, said the worries of most of China's Asian neighbours had become more visible and that typical perceptions consist of : It may be difficult for the world economy to smoothly accommodate a large economy like China if it continues to grow rapidly; Because of China's growth potential, investment and trade opportunities will be directed away from other Asian economies; With China's unlimited supply of unskilled labour, cheap Chinese imports would flood the Asian markets.

With regards to the first concern, Hanna said the world has accommodated larger economies before and it has no problem about embracing China.

China is so far the seventh largest economy in the world. Its total gross domestic product (GDP) reached US$1 trillion in 2000, accounting for 3.7 per cent of the world GDP.

"Our view is that China can probably maintain an average growth rate of 7-7.5 per cent over the next 10 years, especially with the support of WTO liberalization."

Assuming the Chinese economy grows at 7.5 per cent for the next 20 years and the world economy grows at 3.5 per cent during the same period, China's share of the world GDP would rise to 8 per cent in 2020, he said.

Although a jump from 3.5 per cent to 8 per cent in 20 years is phenomenal, the global economy has had experience in accommodating the rapid rise of larger economies in short periods, Hanna said. The Japanese economy had seen its share of world GDP spiralling up from 3.9 per cent to 12.9 per cent from 1960 to 1980.

As to worries that China might take up all the foreign direct investment (FDI), Hanna said FDI into China and Asia had been and will be complementary rather than substitutable.

Talking about trade, another SSB senior analyst Yiping Huang said if China exports more, it will also import more.

It is true that China, with the help of cheap labour and WTO entry, will develop comparative advantages in a number of new industries, mainly labour-intensive sectors, he said. But China cannot produce everything by itself, and will have to import more.

This provides opportunities for the rest of the world, especially the Asian economies, to export more to China.

"The typical pattern of WTO economies is that imports grow faster during the first two years after they join the trading body, and then exports pick up quickly."

In addition, China's competitive edge in labour cost is also thinning out due to the one-child policy, Huang added.

The World Bank expects the share of young workers in China's labour force to fall from 60 per cent in 1990 to 45 per cent 2010. At the same time, the proportion of the aged population will rise from 9 per cent in 1990 to 11 in 2010.

This projection shows that China will have fewer unskilled, young workers and a higher dependency ratio. Thus, its comparative advantage in labour-intensive industries may change quickly, said Huang.

"China will probably lose out to India and Indonesia in labour-intensive industries in the next eight years, as the young-worker share in the latter two countries will fall only slightly from 61 per cent to 57 per cent and from 62 per cent to 55 per cent from 1990 to 2010."

He suggested that other Asian countries should not deem China as a whole when viewing their competition with China, but should find their provincial equivalents that have similar income levels in China's diversified economic structure.

He predicted that this mixed economic structure of individual regional economies will continue in China for a very long time.

Both Huang and Hanna admitted that China's rapid growth after its WTO entry will push some regional economies out of their current industries, but the growing Chinese economy can inject new dynamism into regional economic growth, especially when the importance of the Japanese economy has been declining.

Over the coming decade or two, China is likely to be one of the world's fastest-growing economies and one of the world's largest markets.

"We see this as a rare opportunity for the Asian economies to continue their collective growth success," Hanna said.

He added that it is inevitable that Asia's economies will adjust their structures to be able to benefit from China's growth.

Among them, Hong Kong's future lies in deeper integration with the mainland economy, and Taiwan must restore business and consumer confidence.

Some Asian economies with relatively low-income levels, such as Indonesia, India and Viet Nam have great potential to become important exporters of labour-intensive products. The key for them is to unlock the engine of productivity and efficiency growth through domestic reforms, he said.