China has altered its gross domestic product calculation method for the second time in less than a year, officials said on Tuesday (Jul 5), amid doubts among overseas investors about data accuracy.
The change in the treatment of research and development spending by the National Statistics Bureau (NBS) added US$131 billion to the size of the world’s second-largest economy last year, it said in a statement.
It also revised the GDP figures going back to 1952, changing the growth statistics for 22 out of the 63 years in question.
Most recently, growth rates for 2012 and 2013 were raised to 7.9 per cent and 7.8 per cent respectively, up from 7.7 per cent in both years, the NBS said in a statement.
The increases come with global investors worried about slowing growth in China, a key driver of the world’s economy.
Questions have repeatedly been raised about the accuracy of official Chinese economic statistics, which critics say can be subject to political manipulation. Even Premier Li Keqiang has reportedly expressed doubts about the data.
The latest changes reclassified research and development expenditure as fixed capital formation rather than intermediate consumption.
They come after China switched to quarter-on-quarter calculations in September, rather than using cumulative data, in a bid to adhere more closely to “international” standards, the NBS said at the time.
Also in September, the International Monetary Fund called on China to improve its economic data, especially its growth rate.
“It’s important that China does continue to improve its data quality to reflect the fast-changing structure of its economy,” IMF spokesman Gerry Rice said then.
China’s GDP figure has consistently hit targets set by the ruling Communist Party. But it grew at its slowest in a quarter of a century last year, creating pressure for more stimulus policies.
The 6.9 per cent figure was the slowest since the 3.8 per cent rate in 1990, a year after the bloody Tiananmen Square crackdown rocked the country and isolated it internationally.
Late last year it was revealed China had under-reported coal consumption for years, revising the 2012 figure up 17 per cent to 4.12 billion tonnes. Figures as far back as 2000 were changed in the China Statistical Yearbook, with no explanation from the NBS.