China revises up 2008 growth on services strength
Beijing: China has revised up its 2008 growth rate to 9.6 percent, taking it well above the originally reported 9 percent after calculating that the service sector had been more productive than previously thought.
The upward revision underscored that China was well on track to surpass Japan as the world's second-largest economy in 2010, if not sooner, and has burnt through less energy to deliver each additional ounce of growth.
China may also eventually revise up its 7.7 percent year-on-year growth rate reported for the first three quarters of 2009, though changes would be limited, Peng Zhilong of the National Bureau of Statistics said.
The hidden strength found in the services sector was a modicum of good news for policymakers in China and abroad, who have said that developing the country's non-tradable sector is a key ingredient in rebalancing the global economy.
But it was still far from mission accomplished on that front.
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."
Zhang said the overall picture of a sharp slowdown late last year and a strong recovery this year was still intact. The revisions were thus unlikely to have much, if any, bearing on the government's current policy stance.
The Chinese 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 its ultra-loose pro-growth measures adopted in the face of the global financial crisis.
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.
The country's benchmark stock index closed the day down 0.4 percent, broadly in line with its level before the announcement of the revisions.
"Upward revision of China's GDP numbers are frequent, large and well expected, so we expect little market impact from today's revision," Ting Lu, an economist with Bank of America-Merrill Lynch, said in a research note.
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.