China revises up over a decade of GDP growth

BEIJING – China revised up more than a decade of economic growth yesterday, confirming analysts’ long-held suspicion that output had been advancing even faster than the torrid pace it had previously reported.

Economists said the figures strengthened the case for Beijing to try harder to restrain growth, using such measures as tightening the supply of cash in the banking system. Gross domestic product in 2004 was 10,1 per cent larger than a year earlier, rather than the previously reported 9,5 per cent, the National Bureau of Statistics said in a statement on its website (www.stats.gov.cn).Growth for every year back to 1993 was also revised up, except for 1998.The long-term pattern was little changed, however, showing growth coming off early 1990s peaks to bottom out in 1999 and then accelerate again.The new estimates of growth followed last month’s revision of the level of 2004 gross domestic product, which the bureau hoisted by a sixth, making China the world’s sixth-biggest economy ahead of Italy.Behind both changes was a national census that found the services sector to be bigger than previously measured.Many economists had for years believed that Beijing was underestimating the extent of services output, as businesses from barber shops and food stalls to accountancies and Internet portals proliferated across the country.Yiping Huang, chief Asia economist at Citigroup in Hong Kong, saw reasons for the new figures to be a comfort and a concern for the authorities.”On the one hand growth has been high, so probably there is a strong need for more tightening measures,” he said.On the other hand, the economy looked better balanced than before, with more of the consumption that the authorities have been trying to spur as a reliable source of growth, taking the place of fickle investment and exports, he said.Royal Bank of Scotland strategist Ben Simpfendorfer agreed that the faster growth made it easier to argue for stronger measures to slow the economy, although he did not think the implications were great.”It basically is a better indication of where growth is trending,” he said.”But I don’t think it changes too many fundamental assumptions about the economy.”Beijing has been trying to rein in torrid growth of fixed-asset investment since 2003 by introducing a series of measures, such as restricting bank loans and land supplies.The bureau said China’s 2004 GDP had been 15,9878 trillion yuan, 16,8 per cent more than the previous estimate, giving a precise figure for the new estimates it issued last month.In 2004 the services sector had been 10 per cent bigger than in the previous year, compared with the 8,1 per cent previously estimated.That pushed up the overall growth rate.Growth for 2003 was revised to 10 per cent from 9,5 per cent while that of 2002 was revised to 9,1 per cent from 8,3 per cent.The average growth rate between 1979 and 2004 rose by 0,2 percentage point to 9,6 per cent.A vice minister responsible for economic planning was quoted by state media on January 1 as saying GDP had grown 9,8 per cent in 2005.It was unclear whether her figure would exactly match the standard government estimate due from the statistics bureau this month.- Nampa-ReutersGross domestic product in 2004 was 10,1 per cent larger than a year earlier, rather than the previously reported 9,5 per cent, the National Bureau of Statistics said in a statement on its website (www.stats.gov.cn).Growth for every year back to 1993 was also revised up, except for 1998.The long-term pattern was little changed, however, showing growth coming off early 1990s peaks to bottom out in 1999 and then accelerate again.The new estimates of growth followed last month’s revision of the level of 2004 gross domestic product, which the bureau hoisted by a sixth, making China the world’s sixth-biggest economy ahead of Italy.Behind both changes was a national census that found the services sector to be bigger than previously measured.Many economists had for years believed that Beijing was underestimating the extent of services output, as businesses from barber shops and food stalls to accountancies and Internet portals proliferated across the country.Yiping Huang, chief Asia economist at Citigroup in Hong Kong, saw reasons for the new figures to be a comfort and a concern for the authorities.”On the one hand growth has been high, so probably there is a strong need for more tightening measures,” he said.On the other hand, the economy looked better balanced than before, with more of the consumption that the authorities have been trying to spur as a reliable source of growth, taking the place of fickle investment and exports, he said.Royal Bank of Scotland strategist Ben Simpfendorfer agreed that the faster growth made it easier to argue for stronger measures to slow the economy, although he did not think the implications were great.”It basically is a better indication of where growth is trending,” he said.”But I don’t think it changes too many fundamental assumptions about the economy.”Beijing has been trying to rein in torrid growth of fixed-asset investment since 2003 by introducing a series of measures, such as restricting bank loans and land supplies.The bureau said China’s 2004 GDP had been 15,9878 trillion yuan, 16,8 per cent more than the previous estimate, giving a precise figure for the new estimates it issued last month.In 2004 the services sector had been 10 per cent bigger than in the previous year, compared with the 8,1 per cent previously estimated.That pushed up the overall growth rate.Growth for 2003 was revised to 10 per cent from 9,5 per cent while that of 2002 was revised to 9,1 per cent from 8,3 per cent.The average growth rate between 1979 and 2004 rose by 0,2 percentage point to 9,6 per cent.A vice minister responsible for economic planning was quoted by state media on January 1 as saying GDP had grown 9,8 per cent in 2005.It was unclear whether her figure would exactly match the standard government estimate due from the statistics bureau this month.- Nampa-Reuters