Reading too much into revised gross domestic product (GDP) figures will not add to local economic growth.

In the wake of the announcement of a 16.8-percent revision of the country's GDP for 2004 last Tuesday, some local governments have published new findings about their economies.

The margin by which the national figure increased is impressive because of the sheer size of the Chinese economy, which ranked sixth in the world last year.

But given the developmental gaps between regions, the revision of some local growth statistics will appear even more dramatic.

Beijing and Guangdong Province were among the first to report updated GDP figures.

The capital's GDP last year was revised to 606 billion yuan (US$74.2 billion) 41.5 percent higher than previously reported. Beijing's per capita GDP thus topped US$4,970 last year, ranking second only to Shanghai.

South China's Guangdong Province saw its GDP for 2004 revised up by 17.6 percent to 1.89 trillion yuan (US$228 billion), high enough to secure its position as the largest economy among provinces and municipalities.

With a per capita GDP level equal to that of an upper middle-income country, Beijing will be more confident about the actual progress in economic and social development that has been achieved.

Officials in Guangdong Province can set their minds at ease, at least for the moment. Not long ago, talk of East China's Shandong replacing Guangdong as the No 1 provincial economy was making headlines across the country. Guangdong can breathe a little easier as the new statistics show the size of its economy led that of Shandong by more than 380 billion yuan (US$47 billion), not merely 55 billion yuan (US$6.8 billion) as previously thought.

But the upward revision of GDP figures is not only an occasion for rejoicing and relief. The excitement among some local officials regarding inflated GDP figures, unfortunately, demonstrates a diehard tendency to put economic measures of progress before everything else.

As a better evaluation system to properly gauge a region's social, economic and environmental improvement is yet to be introduced, GDP figures will continue to be widely used to assess development and aid policy-making.

But that does not mean GDP growth should be all that local officials pay attention to. Focusing excessively on a few statistics will distract policy-makers from reality.

More important than the revision of GDP figures is the improved assessment of local industrial structure that the first national economic census provided.

Underestimates of the size of the service sector explained much of the recently added output in the national economy. This is particularly true in relatively developed regions.

After the revision, Beijing's ratio of service sector to GDP in 2004 rose from 60 percent to 67.8 percent. That ratio in Guangdong increased from 36.8 percent to 44.3 percent.

The larger-than-expected weight of the service industry indicates the industrial structure of local economies may be more desirable than previously supposed. An expanded service sector not only will boost employment opportunities but also should reduce energy consumption.

Nevertheless, past ignorance has largely prevented policy-makers from putting a booming service sector in perspective. Therefore, to make the most of the latest economic survey, local officials should promptly adjust policies to tap this new source of growth.

(China Daily December 27, 2005)