China: Data revision lifts 2013 GDP by $305bn
China: Data revision lifts 2013 GDP by $305bn.Reuters

Beijing has made an upward revision of the estimated size of the world's second largest economy for 2013, by 3.4% to 58.8tn yuan ($9.45tn), but said the revision will not affect the economic growth rate this year.

The increase was driven by a revision of contribution from the services sector, China's national statistics office said.

Updated data showed that the services sector accounted for 46.9% of the 2013 GDP, up from an initial estimate of 46.1%, while the secondary sector – which includes manufacturing and construction – accounted for 43.7% of GDP, down from 43.9%.

The revision marks an increase of 1.9tn yuan or $305bn (€248bn, £195bn) in the size of the Chinese economy that year.

The revision has added output almost equal to the Malaysian economy for 2013. Malaysia's 2013 GDP was $312bn, according to World Bank statistics.

The revised estimate follows a new economic census in which the National Bureau of Statistics (NBS) changed its methodology, Reuters reported. But NBS did not clarify if it had added research and development (R&D) spending into GDP or revised the way it computes the value of "housing services" that homes provide to their owners, as some economists' reports had predicted it would.

R&D spending, which is around 2% of GDP, is officially classified as a business cost, and not as investment, in China.

Why now?

The Chinese government has been trying to improve its statistical system amid widespread scepticism about the reliability of its data.

The NBS said it was still revising the historical GDP data series, which could show revised economic growth for 2013 and previous years.

Some analysts had previously expected the GDP revision to make it easier for the regime to meet its growth target of around 7.5% in 2014.

But the bureau said in a statement: "The revision of 2013 GDP could affect the size of 2014 GDP but will basically not affect GDP growth for 2014."

Capital Economics' Mark Williams said in a note: "Today's revision is not the end of the story."

"The NBS has also been adjusting the national accounts data to bring them into line with international best practice. These changes now seem likely to be introduced early next year," he said, adding that the change of methodology could lead to another increase of 3% to 5% in GDP.

China's third economic census, published earlier in the week, showed that the services sector had expanded at a faster pace than manufacturing between 2009 and 2013.

The past two censuses led to a 4.4% revision to 2008's GDP size and a 16.8% increase in 2004.