Last week China released the preliminary results of its third economic census and its impact on national economic statistics. The headline number was an increase for 2013 GDP level of 3.4% (RMB 1.9tr, USD 308bn), driven primarily by an upward revision and re-categorization in tertiary industries. A USD 308 billion revision, roughly equivalent to Malaysia and Singapore’s 2013 GDP, may seem large but the Bureau of National Statistics noted that this revision was the smallest of its past revisions following the 2004 and 2008 economic census. They note the improved performance is due to better accounting of the service sector. The revision was also encouraging for those hoping for signs of rebalancing in China, following the revision the tertiary sector share of GDP was raised from 46.1 to 46.9 percent of GDP, while secondary industry fell from 43.9 percent to 43.7 percent of GDP.
China’s 2013 GDP could be raised even further yet. Many analysts had expected that the new GDP estimate would also include China’s transition to the 2008 System of National Accounts (SNA) standard, as the US, Australia, Europe, and many other economies have done recently. However, these changes were not incorporated in this round of revisions. This transition will not only impact the level of GDP, but also the growth rate. We estimated in a previous post, the impact of R&D capitalization on 2013 GDP growth would be about 20 basis points. Rhodium Group estimates that the impact of the census and the accounting change would be 5-10% of GDP.
Impact of 2013 Census on 2013 GDP by Industry (RMB trillion)
Source: China National Bureau of Statistics