Friday, December 25, 2009

China revises 2008 GDP higher

China's economy grew at 7.7 percent in the first three quarters of 2009 compared with the same period a year ago. Peng Zhilong of the National Bureau of Statistics said the government would likely revise up growth figures reported thus far this year.

The hidden strength found in China's services sector was a modicum of good news for policymakers in China and abroad, who have said that promoting the development of the country's non-tradeable sector is a key ingredient in rebalancing the global economy.

But it was still far from mission accomplished on that front.

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China's services sector accounted for 41.8 percent of gross domestic product last year, up from the previously reported 40.1 percent. In developed economies, services often contribute more than 70 percent of GDP.

"China always finds it hard to get accurate statistics about the services sector, and the upward revision is not a surprise," Zhang Xiaojing, a researcher with the Chinese Academy of Social Sciences (CASS), said. "But we cannot say China's economic structure is reasonable simply because of that."

The revisions were also unlikely to have much, if any, impact on the country's current policy stance. The government has already begun to rein in its ultra-loose pro-growth measures adopted in the face of the global financial crisis.

Zhang of CASS said the overall picture of a sharp slowdown late last year and a strong recovery this year was still intact.

China's central bank earlier this week reaffirmed its long-standing commitment to maintain an "appropriately loose" monetary policy. The government this week also pledged to deliver the second half of its promised two-year 4 trillion yuan ($585 billion) stimulus package in 2010.

Yet beneath this headline stability, Beijing has started to wind down some parts of its stimulus.

Over the past month, it has scaled back a tax exemption on property sales, increased a tax on automobile purchases, vowed to crack down on speculation in the sizzling housing market and outlined how it will more strictly control bank lending.

Less energy intensity

The revisions also showed that China has made more progress towards its goal of cutting energy intensity, or the amount of energy it uses to produce each dollar of national income.

The country used 5.2 percent less energy per GDP unit in 2008, a bigger drop than the previously reported 4.6 percent fall, the statistics bureau said.

The country set a goal of cutting energy intensity by 20 percent over the five years to 2010, even as overall energy consumption continues to rise.

Originally presented as part of a drive to reduce reliance on overseas oil and gas and to curb damaging pollution, in recent years the efficiency target has also been promoted as a key part of efforts to curb growth in greenhouse emissions.

China is under pressure as the highest annual emitter of the gasses that cause global warming. It has faced a firestorm of international criticism after climate negotiations in Copenhagen ended last week with a broad, non-binding accord that fell short of hopes for a robust global agreement on how to curb emissions.

Beijing says that its emissions per capita and over the course of history are lower than those of rich nations that went through long, dirty periods of industrialisation.

The GDP and energy intensity revisions reflected the results of China's second national economic census, completed earlier this year.

The first census, conducted in 2005, resulted in revisions to growth rates from 1993 to 2004. Peng, the statistician, said China was still working on revising figures for 2005 through 2007. 

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