The World Bank welcomes the release of the new National Accounts data for China. The new data, released by the National Bureau of Statistics (NBS) today, show a GDP estimated for 2004 some 16.8 percent higher than was previously recorded.

"These new GDP data are a major improvement over the previous ones" said Chief Bert Hofman of the Economics Unit of the World Bank Office in Beijing, "and they are the result of the hard work of NBS staff and all people involved in this year's National Economic Census." The data will give better information on the current situation in the economy as well as on structural issues such as sectoral shares in the economy.

"The new data are very timely" Hofman said, "as many policy issues that the government wants to tackle in the forthcoming 11th Five Year Guideline need reliable data for those issues to be assessed correctly." Hofman noted that some of the ratios that have drawn policymakers' attention, such as Investment to GDP, Services to GDP and Energy Intensity, are likely to change in light of the new GDP numbers.

The World Bank notes that it is not uncommon that countries with rapid growth regularly see major revisions in their GDP. Misha V. Belkindas, Manager of the World Bank's Development Data Group in Washington DC notes: "Among the recent examples are Indonesia, where the 2004 revision in the National Accounts resulted in a 17 percent increase in GDP, Italy, where the 1987 revision showed an increase in 1982 GDP of more than 17 percent, and Norway, where the 1995 revision resulted in an increase of some 11 percent in measured GDP."

In many countries around the world, introduction of better methods such as the 1993 System of National Accounts (SNA) also brought about significant revisions in GDP. For instance, for Denmark, the introduction of the 1993 SNA resulted in an upward revision of 1996 GDP with 7.4 percent. According to the Bank, the order of magnitude of China's revision is by no means an exception, and revisions tend to be larger for countries that grow faster. The reason for that is that many new enterprises are established in dynamic economies, which are only imperfectly captured by the statistical system. Moreover, surveys to determine GDP tend to under-represent rapidly growing enterprises.

"The important thing is that we now have better data to work with," Hofman said "and we are looking forward to a technical briefing by NBS to understand the detail of the revisions." With the increase in measured GDP, China passes Italy to become the 6th largest economy in the World in terms of US dollars, up from 7th place with the old data.

(China.org.cn December 20, 2005)