Waltham, MA, 3 May 2006 - Analysis by the China Regional Service just launched by Global Insight, the world's leading company for economic and financial analysis and forecasting, shows China's "mega-province" of Shanghai and Jiangsu surpassing South Korea to become Asia's third largest economy by 2017, behind only Japan and India (China excluded). Two other Chinese provinces are forecast to surpass South Korea by 2021.

The China Regional Service long-term forecast provides analyses and projections for key regional economic indicators out to 2025. According to the Global Insight forecast:

• The Shanghai-Jiangsu mega-province will leapfrog Belgium, Switzerland, Sweden, and Taiwan in 2006 to become the world's 18th largest economy;
• Subsequently, Shanghai-Jiangsu will surpass Turkey (in 2007), the Netherlands (2011), Australia and Brazil (2014), Mexico (2016), Korea (2017), Canada (2019), and Spain (2023);
• By 2025, Shanghai-Jiangsu will be the 9th largest economy in the world, following closely by China's two coastal provinces, Guangdong and Beijing-Tianjin-Hebei.

In 2005, the Shanghai-Jiangsu mega-province's GDP was $335 billion, making it the sixth largest in Asia and 22nd largest in the world. Guangdong's 2005 GDP was $265 billion and the Beijing-Tianjin-Hebei mega-regional GDP was $251 billion, ranking them the 7th and 8th largest Asian economies, respectively. All three regions are along the coast of China or, in the case of Guangdong, bordering Hong Kong.

These coastal regions are where China first established special economic zones in the early 1980s, encouraging foreign direct investment and international trade. By contrast, the interior mega-province of Chongqing-Sichuan falls behind in market reforms and subsequently its GDP falls two-thirds below that of Shanghai-Jiangsu. Additionally, sharp differences exist in the degree of openness between the coastal regions and the rest of China. For example, about 80% of the coastal regions' GDP comes from merchandise trade. However, the rest of the China regions have a trade-to-GDP ratio average around 10%. The disparity of concentration for foreign direct investment between coastal and interior regions is even more pronounced. In 2004, the coast attracted about 85% of foreign direct investment into China, while central China attracted about 12% and western China about 3%.

The undisputed champion in economic openness, however, is Guangdong province. Because of its proximity to Hong Kong, Guangdong has been able to attract vast inflows of export-oriented investment from Hong Kong since the outset of China's market reform. Merchandise trade accounts for about twice Guangdong's annual GDP, with nearly 17% of FDI into China in 2004 going to Guangdong.

In addition to short, medium and long-term forecasts, Global Insight's new China Regional Service assesses the business climate in China's 31 regional economies, providing Same-Day Analysis of key economic, political, and regulatory developments, individual provincial risk ratings, and quarterly regional forecasts and reports. Regional profiles are also included that cover economic conditions, investment climate, operational issues, infrastructure, and politics and security. China's regions are divided into 31 administrative units comprised of 4 provincial administrative level municipalities, 5 autonomous regions, and 22 provinces, with each of the units covered in detail by the China Regional Service.

More information regarding Global Insight's China Regional Service, forecasting, analysis, and same-day commentary can be found at: www.globalinsight.com/chinaregional.

Contact:

Todd C. Lee, Managing Director, Greater China Service, Global Insight
+1 (781) 301-9026 (todd.lee@globalinsight.com)

William Hess, Sr. Analyst, China Regional Services, Global Insight
+86 13-43953-8518 (william.hess@globalinsight.com)


Jim Dorsey, Media Relations, Global Insight
+1 (781) 301-9069 (jim.dorsey@globalinsight.com)

About Global Insight
Global Insight, Inc. (http://www.globalinsight.com) is a privately held company that brought together the two most respected economic information companies in the world, DRI and WEFA. Global Insight provides the most comprehensive economic and financial information available on countries, regions and industries, using a unique combination of expertise, models, data and software within a common analytical framework to support planning and decision-making. Through the world's first same-day analysis and risk assessment service, Global Insight provides immediate insightful analysis of market conditions and key events around the world, covering economic, political, and operational factors. The company has over 3,800 clients in industry, finance and government with revenues in excess of $80 million, over 600 employees and 23 offices in 13 countries covering North and South America, Europe, Africa, the Middle East and Asia.