China's census surprise may help government policies
(bloomberg.com)
Updated: 2005-12-22 15:41

Incomplete Statistics

The share of the services industry in the nation's economic output was revised up by more than a quarter to 40.7 percent due to a surge in the number of privately owned companies including restaurants, hair salons and decorating businesses, the bureau said on Dec. 20.

Incomplete statistics have made it more difficult for economists and investors to gauge the state of the Chinese economy. Until 2003, annual gross domestic figures were released by the Xinhua news agency before the end of each year.

Countries including the U.S. and the U.K. compile GDP data based on the so-called expenditure method, which includes consumption, investment and net exports. China uses the production method, a legacy of state planning that measures economic activity based on output rather than consumption.

The government does give annual GDP data under the expenditure method in a report published eight months after the end of the year, without giving breakdowns in real prices. It has pledged to start providing quarterly data under the expenditure method at an unspecified future date, according to the International Monetary Fund's Web site.

"When you are trying to forecast the economy, it makes much more sense to forecast in terms of what consumers are spending rather than how that demand is met from production,'' said Jessop of Capital Economics.