China's gross domestic product (GDP) for 2004 was 15.9878 trillion yuan (US$2 trillion), up 2.3 trillion yuan (US$284.9 billion), or 16.8 percent from preliminary figures.

The country's top statistician Li Deshui made the announcement at a press conference organized by the Information Office of the State Council, citing the results of a national economic survey.

The country has overtaken Italy as the world's sixth largest economy.

The value-added worth of the tertiary industry was 6.5018 trillion yuan (US$805.3 billion), 2.1297 trillion more than the annual preliminary estimate announced earlier this year. And the industry's share in national GDP was revised from the earlier estimated 31.9 percent to 40.7 percent, an increase of 8.8 percentage points.

The increase of service sector output accounted for the largest part, or 93 percent of GDP.

Li said China had long been using the Material Product System (MPS) which was developed under the centrally-planned economic system in its national account statistics until the 1980s, resulting in "very weak" statistics for the service sector.

The scope of tertiary industry is turning wide and complex with a large number of units, which have no good means for accounting and statistics, he said.

Meanwhile, along with the economic reform, China has seen a diversified economic development in terms of ownership, and in particular, a dynamic development of private and individual-run service activities.

"It is very difficult to conduct statistical surveys as they are very scattered and frequent changes have to be taken into account, resulting in a certain degree of under-coverage," said Li.

While many new services are mushrooming, data on their activities are often underestimated, he acknowledged.

Li added that some of the services affiliated to manufacturing or construction enterprises are estimated but classified into the secondary industry, while others are neglected altogether.

The value-added worth of the secondary industry was 7.3904 trillion yuan (US$915.4 billion) in 2004, 151.7 billion more than original estimates, while the industry's share in national GDP shrank from the preliminarily estimated 52.9 percent to 46.2 percent, a drop of 6.7 percentage points.

"Through the survey, we are able to remove the 'water' from the statistics of the manufacturing sector, in particular, from small-sized enterprises," Li said.

Analysts say some small firms, including township enterprises in the rural areas, have been exaggerating their output figures to help local governments and officials showcase their "political achievements" hoping to be promoted.

Li said the share of the primary industry was still based on the figure from the annual preliminary estimate, as the industry was not covered in the survey.

The value-added worth of the primary industry was 2.0956 trillion yuan (US$259.5 billion), and the industry's share in national GDP was 13.1 percent, 2.1 percentage points lower than preliminary figures.

Results from the latest survey will not affect the nation's macro-economic policy, Li said. "The changes in the figures do not mean the traditional statistics have affected China's policy-making."

The survey's leading group was set up under the State Council, China's cabinet, and headed by Vice Premier Zeng Peiyan, with governments at all levels and concerned departments participating.

More than 3 million enumerators and supervisors were recruited, and another 10 million statisticians and accountants from government agencies, enterprises and institutions were mobilized to participate in the survey, according to Li.

More than 30 million questionnaires were collected in the survey with more than 1.06 billion records of first hand raw data, Li said, adding that a sample survey showed that the comprehensive reporting error was only 4.9 per thousand, within the 1 percent target.

Confidentiality

"In the publication, utilization and analysis of the survey results, departments and local governments concerned should continue to abide by the Statistics Law and the Regulations on National Economic Surveys, to protect business confidentiality and the privacy of the respondents, and to honor earnestly the commitments of not levying any penalties on respondents on the basis of survey information," Li said.

The NBS is working on the revision of data from as far back as 1993 on the basis of the revised GDP figures in the survey year, using the trend deviation method which has been adopted by the Organization for Economic Cooperation and Development, Li said.

"Results of the revision will be released at another time," he added.

According to the State Council's decision, the survey results will be used as a basis for the central government and for local governments in compiling 2005 national account statistics, in highlighting economic and social development for the 10th Five-year Strategy period (2001-2005), and in preparing the 11th Five-year Development?Strategy and the 2006 annual development plan, he said.

Li said the results of the survey indicate that the structure of the three industries is more consistent with the actual situation in China and more in line with the general level of developing countries.

But he noted that although the revision leads to some increase in the total size of GDP, China still ranks below 100 in the world in terms of per capita GDP.

(Xinhua News Agency December 20, 2005)