Chinese Economy Revised Upwards By 3.4% For 2013

Chinese Economy Revised Upwards By 3.4% For 2013
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China’s National Bureau of Statistics announced on Friday that it was revising the estimated size of the country’s economy for 2013 upward by 3.4% to 58.8 trillion yuan ($9.5 trillion).

This represents a net increase of 1.9 trillion yuan, or around $305 billion, in the size of the Chinese economy in 2013. The agency noted the larger estimated size was primarily due to an upward revision of the growth in the services sector last year. The new statistics are based on data from the third economic census released earlier this week.

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Chinese Economy – More on statistics revisions

The revised economic statistics showed the services sector accounted for 46.9% of 2013 GDP, a 0.8% increase from the earlier estimate of 46.1%. The secondary sector (including manufacturing and construction) represented 43.7% of GDP, down from 43.9%.

The statistics bureau noted that the revisions of the historical GDP data series was still ongoing, and more revisions to economic growth for 2013 and previous years could be expected.

“The revision of 2013 GDP could affect the size of 2014 GDP but will basically not affect GDP growth for 2014,” the bureau said in a statement.

Analysts had previously speculated that the GDP revision might be to make it easier for the government to hit its growth target of 7.5% in 2014.

The revised figure is the result a new economic census with a revamped methodology. The bureau did not say, however, that it had added research and development spending into GDP or made any changes in the way it determines the value of “housing services” that homes provide to their owners.

R&D spending represents 2% of GDP, but is officially categorized as a business expense rather than an investment in China. The U.S. changed the way it calculates gross domestic product to include R&D spending back in 2013.

The recent third economic census confirmed that the services sector had grown more rapidly than the manufacturing sector between 2009 and 2013.

Of note, the past two Chinese economic censuses led to a 16.8% upward revision to 2004 GDP size and a 4.4% increase in GDP in 2008.

Chinese economy – Skepticism about reliability of data

Chinese authorities have stated they are working on improving the country’s statistical system given widespread skepticism about the reliability of its data. Financial sector analysts say, however, say that only minor improvements have been seen to date.

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