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Analysts expect China to revise GDP by 20%
(AFP)
Updated: 2005-12-18 13:51
China will leapfrog Italy, France, and Britain to be officially recognized as
the world's fourth-biggest economy if, as expected, it revises up its 2004 gross
domestic product by nearly US$300 billion, analysts said.
"As if China's economy was not growing fast enough, thanks to a statistical
revision, growth in 2005 looks like being about 30 percent," Standard Chartered
economist Stephen Green said in a research note.
Shoppers get into
the Christmas spirit at a shopping mall in Beijing. China will leapfrog
Italy, France, and Britain to be officially recognized as the world's
fourth-biggest economy if, as expected, it revises up its 2004 gross
domestic product by nearly US$300 billion, analysts said.
[AFP] | China's National Bureau of Statistics is expected to announce Tuesday the
results from the country's first nationwide economic census, which, according to
Hong Kong's South China Morning Post, will show that China's GDP has been
understated by some US$300 billion.
"The recent national economic survey has apparently found another 2.4
trillion yuan (US$296 billion) worth of output," Green said.
The new-found figure is equivalent to 17.5 percent of last year's GDP.
"Most of the extra output is in services since the statistical apparatus is
not that good at measuring the sector," Green said.
"The change will also affect our understanding of investment. It is still
growing fast, but the economy should become a little less dependent upon it."
Officials from the statistics bureau refused to comment, but a spokeswoman
from the cabinet-level China Economy Census Office, the office that took the
census, told AFP that such media reports were "baseless."
"The specific GDP figures will be published on December 20. What has been
reported in various media is baseless," the spokeswoman, who refused to identify
herself, told AFP.
Green said the revised figures would greatly bolster per capita GDP, while
lowering China's external debt in terms of its percentage to GDP as well as the
country's burdensome non-performing-loan/GDP ratio.
"The IMF (International Monetary Fund) was looking for domestic debt at
year-end 2005 to be worth 19.6 percent of GDP. That can now be revised down to
about 16 percent," Green said.
Other analysts agreed that the revised figures would allow the Chinese
government to spout more good news about its booming economy, but expressed
caution about the intentions behind the move.
"They are making this announcement for two purposes. The government has been
criticized for over-investment, so this will make the investment a smaller
percentage of GDP," Andy Xie, chief Hong Kong-based economist for Morgan
Stanley, told AFP.
"Also they want to sustain optimism, especially optimism among foreign
investors."
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