The situation of the global economy and the outlook for developing countries is brighter than a year ago, and China has played a vital role in the global recovery, the United Nations Conference on Trade and Development (UNCTAD) said in a new report released Thursday.

While the US economy has provided a strong demand stimulus to the rest of the world, several developing economies in Asia, in particular China, have been able to increase not only their imports -- with strong spillover effects in economies in the Asia and Pacific region -- but also their exports at double-digit rates, concludes the Trade and Development Report 2004.

In 2003 and the beginning of 2004, China was a major engine of growth for most countries in East and South Asia, according to UNCTAD.

"A large proportion of its imports, which have been growing even faster than its exports, are coming from the rest of Asia," says the report.

UNCTAD forecasts that in 2004 rapid growth is likely to continue in East and South Asia, and particularly in the two largest economies, China and India.

Although exports to the United States continue to be an important component of total output growth in East and South Asia, this region has generated an intraregional pattern of demand and specialization that should allow it to maintain a relatively stable growth path independent of cyclical and structural problems in the rest of the world, says the report.