China changes GDP data calculation method to improve accuracy
There has long been widespread scepticism over the reliability of official data about the world’s second-largest economy
China’s statistics bureau said on Wednesday it has changed the way quarterly gross domestic product data is calculated – a move it calls a step to adopting international standards and improving the accuracy of Chinese figures.
The move by the National Bureau of Statistics comes after China said in July its annual growth rate in the second quarter was 7 per cent – the same as in January to March. Many economists believe the April to June pace was lower.
READ MORE: China tries to calm investors nerves, saying markets stabilising and more reforms on way
The combined economic output of China’s provinces has long exceeded that of the national level compiled by the bureau, raising suspicion that some growth-obsessed local officials have cooked the books.
Now, China is calculating gross domestic product (GDP) based on economic activity of each quarter to make the data “more accurate in measuring the seasonal economic activity and more sensitive in capturing information on short-term fluctuations”, the bureau said.
Previously, China’s quarterly GDP data, in terms of value and growth rates, was derived from cumulated figures rather than economic activity of that particular quarter, the bureau said.
The new methodology – in line with that of major developed countries – would pave the way for China to adopt the International Monetary Fund’s Special Data Dissemination Standard (SDDS) in calculating GDP, it said.
It has revised down year-on-year economic growth rates for every quarter last year by 0.1 percentage points, following its revision on Monday of the 2014 annual economic growth rate to 7.3 per cent from 7.4 per cent.
The bureau has also revised down growth rates in the first two quarters of 2012 by 0.1 percentage points respectively and revised up the fourth quarter by 0.1 percentage points.
For 2015, China is targeting annual economic growth of “around” 7 percent, which would be the weakest expansion in a quarter of a century
