China revises GDP calculation framework for first time since 2002

China Dow Jones Newswires

A Chinese flag is seen in Beijing's central business area, China, January, 2017. (REUTERS / Jason Lee)

BEIJING--China has revised the way it measures the size of its economy, the first such change since 2002, in what it says is an effort to better align its data with international standards. 

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The adjusted framework for calculating gross domestic product--approved last week by China's cabinet, the State Council--include the addition of the health-care, tourism and "new, emerging economy" industries to the data's calculations, the National Bureau of Statistics said in a statement posted on its website Friday. The new economy typically refers to those companies that are in the high-technology sector or considered to be environmental friendly. 

The statistics bureau didn't say whether the changes would result in the revision of historical data or if they would be reflected in the second-quarter GDP data schedule for release Monday. 

Economists polled by The Wall Street Journal expect China's economy to have grown 6.8% from a year ago, down slightly from the first quarter's 6.9% expansion. 

The NBS said the classification and definitions of certain data sets are also being revised. For example, intellectual property will be broken out as a separate item under nonfinancial assets, while workers' equity holdings in their employers will be counted as part of their income. 

The agency said that some of the changes have already been incorporated into its calculations but others would take more time because of the substantial amount of work required to implement them. 

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The latest revision is unlikely to affect next week's economic data but will probably be reflected over the medium-to-long term, said Yang Zhao, an economist at Nomura Group. 

"If, say, under the new framework, it turned out China doesn't need high growth rates to reach the goal of doubling per-capita income by 2020, then it may have some major impacts on policy-making in the future," he said.

 

--Liyan Qi

 

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