China adjusted method for calculating GDP

Almaty. July 7. Silkroadnews – China’s National Bureau of Statistics has changed the method of calculating the GDP, Channel News Asia information portal reports.

“China has altered its gross domestic product calculation method for the second time in less than a year amid doubts among overseas investors about data accuracy. The change in the treatment of research and development spending by the National Statistics Bureau (NBS) added $131 billion to the size of the world’s second-largest economy last year,” said in a statement.

It is noted China’s Premier Li Keqiang also reportedly expressed doubts about the data accuracy.

“The increases come with global investors worried about slowing growth in China, a key driver of the world’s economy. Questions have repeatedly been raised about the accuracy of official Chinese economic statistics, which critics say can be subject to political manipulation. Even Premier Li Keqiang has reportedly expressed doubts about the data,” the publication stated.

As reported, according to the changes introduce, the research and development expenditure will be considered as fixed capital formation.

“The latest changes reclassified research and development expenditure as fixed capital formation rather than intermediate consumption. They come after China switched to quarter-on-quarter calculations in September, rather than using cumulative data, in a bid to adhere more closely to “international” standards”, the statement explains.

It is noted that the NBS also revised GDP figures going back to 1952, changing the growth statistics for 22 out of 63 years in question; most recently the growth rates for 2012 and 2013 have also been revised and raised to 7.9% and 7.8% respectively, up from 7.7% for both years.