Burgeoning Services Prompt China to Revise 2004 GDP
December 23, 2005
On December 20 China revised its 2004 gross domestic product to 15.988 trillion RMB, an increase by 2.3 trillion RMB, or 16.8%. Ranking as the sixth largest economy in the world, China has surpassed Italy and may catch up with France in 2005, right behind the United Kingdom, Germany, Japan, and the United States. The new figure came from a dramatic adjustment in service sector activity, which was changed to 40.7% from 31.9%. Mining, manufacturing, and construction share of GDP was adjusted down from 52.9% to 46.2%. The change in GDP composition points to lower risk that China's economy will overheat, as well as reveals a much-needed increase in domestic demand and lower reliance on manufacturing and exports. However, the new data is more likely to encourage calls for RMB revaluation. The restatement came about after China's first economic census involving three million auditors.