November 20, 2019 / 2:57 AM / 2 months ago

China to revise 2018 GDP to reflect asset, business growth

BEIJING (Reuters) - China will revise its 2018 gross domestic product (GDP) estimate in the next few days to reflect an increase in the number of businesses and assets recorded in the last census, officials said.

FILE PHOTO: A worker pulls a cart at a construction site near new apartment high-rise buildings in the Shekou area of Shenzhen, Guangdong Province, China, December 13, 2018. REUTERS/Thomas Peter/File Photo

China’s fourth National Economic Census, released on Wednesday, included “richer” data points that showed more business entities and a bigger total asset base in 2018 than assumed under earlier GDP estimates, Li Xiaochao, deputy head of the statistics bureau, told Reuters.

While the revisions typically have no immediate bearing on policy, some analysts see other implications for longer-term economic targets if past estimates are revised higher.

Li said the details of the revision would be made public “in a few days” but declined to say if they would lead to higher or lower output or GDP growth rate for 2018.

China routinely revises its annual GDP data, typically making a final revision at the end of the calendar year.

The world’s second-largest economy grew to 90.03 trillion yuan ($12.81 trillion) in 2018, according to preliminary revisions this year. The 6.6% growth was the slowest in almost three decades but was in line with Beijing’s target of around 6.5%.

Days before GDP data for 2018 was released in January, the statistics bureau cut its final 2017 GDP growth figure to 6.8% from 6.9%.

Such revisions could affect longer-term projections, analysts say.

“After the historical data is adjusted, then the lower limit of the economic growth target can be set to 5.5%, making it much less difficult to achieve,” Huang Wentao, chief macro and bond analyst at China Securities, wrote in a note last month.

China aims to double its GDP and per capita income by 2020 from 2010 levels. It has also set a 2019 GDP growth target of 6%-6.5%.

At a briefing on Wednesday, Li told reporters the planned 2018 GDP revision is not for the purpose of meeting a certain target, but to reflect changes in accounting rules and data sources.

New data from the 2018 census showed services sector assets far outweighed those in the industrial and mining sectors, including manufacturing and construction, with a ratio of 81% versus 19%. Services also contributed more in revenues and jobs.

Revisions to historical GDP figures will also be made, Li told reporters.

The third economic census was published in late 2014, after which China revised up the size of its economy in 2013 by 1.9 trillion yuan, or 3.4%, to reflect a bigger contribution from the services sector, although there was no subsequent change to that year’s growth, which remained at 7.7%.

Analysts expect GDP growth to slow to 6.2% this year as domestic demand softened and a Sino-U.S. trade war persisted.

($1 = 7.0283 Chinese yuan)

Reporting by Yawen Chen and Gabriel Crossley; Writing by Ryan Woo; Additional Reporting by Stella Qiu; Editing by Edwina Gibbs and Sam Holmes

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