Wall Street Journal: China Lifts '08 Figures on Growth
By AARON BACK and TERENCE POON
BEIJING -- China reported revisions to official data that showed its economy was faster-growing, more services-based and closer to overtaking Japan as the world's second-largest economy than previously estimated.
The National Bureau of Statistics said Friday that China's 2008 gross domestic product was 31.405 trillion yuan, or around $4.6 trillion, about 4.5% larger than the previous estimate of 30.067 trillion yuan. Real economic growth for the year was revised to 9.6% from 9%.
The bureau said the updated numbers better reflect how big services are as a portion of the economy. The changes also showed China's economy to be more energy-efficient relative to economic output: The statistics bureau said China used 5.2% less energy per unit of GDP than previously reported, because the estimate of energy consumption last year was raised by less than the increase in estimated economic output.
The data revisions are the result of a continuing economic census, part of the government's efforts to improve the quality of its statistics, whose accuracy has been questioned by many analysts. The effort aims to better monitor the size of small businesses, which tend to be privately owned service-sector enterprises that aren't well-measured by the existing system.
The statistics bureau said the updated numbers for 2008 show services accounted for 41.8% of GDP, compared with the original reading of 40.1%. That is still well below the levels in many Western economies, which often top 70%. Agriculture and related "primary" industry activities, shrank under the new figures to 10.7% of 2008 output, from 11.3% in the earlier estimate.
The government said the revision won't have a significant effect on the GDP growth figure for 2009. But because the changes provide a higher statistical base for the economy going into this year, it could mean that fast-growing China overtakes relatively anemic Japan more quickly as the world's second-biggest economy after the U.S.
While exchange-rate variations make it hard to predict the precise timing of the change, "it's just a matter of time" before China passes Japan, said BOC International Holdings chief economist Cao Yuanzheng.
The International Monetary Fund estimated in October that Japan's GDP for 2009 would be $5.048 trillion in dollar terms, just over 6% larger than China's $4.758 trillion. The IMF's forecast also predicted China's economy overtaking Japan's in 2010.
Data revisions aren't unusual in most economies. China's revision Friday is different from regular quarterly re-evaluations, however, in that it represents a recalibration of the statistics bureau's model for evaluating GDP. The new estimate follows a more dramatic 17% increase it made in late 2005 to its estimate for 2004 GDP, a revision that also reflected larger readings on the size of the services sector.
The government said the latest figures show it is on track to achieve its energy goal. Beijing has pledged to use 20% less energy to power relative to economic output in 2010 compared to 2006.
It's unclear whether the data revisions might affect China's goal for reducing its measure of carbon emissions relative to GDP, known as "carbon intensity," which is an extension of the energy efficiency target. China has pledged to cut emissions by 40% to 45% from 2005 levels by 2020. But some analysts said the changes could help China reach that target.
"At the current pace, it should be a reasonable goal," Bank of America - Merrill Lynch economist Lu Ting said Friday in a research note about the revised data.
Statistics bureau Director Ma Jiantang said the data also showed that private enterprises have grown rapidly as a part of the economy, although he acknowledged there have been cases where the state's role has grown at the expense of the private sector, and said China should do more to promote private enterprise.
Some critics have said that that the state and its companies have expanded their share of the economy at the expense of private companies in recent years, especially under the government's four-trillion-yuan stimulus program launched late last year.
Peng Zhilong, who heads the statistics bureau's national accounts department, suggested GDP growth figures in the first three quarters of 2009 were also understated.
Existing data have already shown a sharp pickup in growth this year as a result of the economic stimulus program --a mix of government investment in infrastructure and an enormous expansion in bank lending. GDP growth accelerated from 6.1% compared to a year earlier in the first quarter to 8.9% in the third quarter, according to numbers previously reported.
-Liu Li and Victoria Ruan contributed to this article.