China’s economy growing faster than thought

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Following its upward revision to the overall GDP figure last month, China’s National Statistics Bureau has reported that growth has been faster than expected for almost all of the past 12 years.

Previously economists thought that China was over-estimating its growth. However, now it appears that China has been under-estimating the growth in services.

Growth rates were revised up for all years between 1993 and 2004 except for 1998, while in the past few years the upward revision has been quite large.

For example, the GDP growth rate in 2004 was revised up to 10.1% from 9.5%. The growth rate for 2003 was revised up to 10% from 9.5%, while the growth rate fo 2002 was revised up to 9.1% from 8.3%.

GDP growth in 2005 could be reported at 9.8%.

A revision to the way national statistics are calculated led late last year to a massive upward revision to China’s gross domestic product (GDP) figures. It puts China as the 6th largest economy in the world in 2004 and probably the 4th largest, ahead of France and the UK, in 2005.