The Chinese government has announced that its economy in 2004 was almost 17 percent larger than previously reported. With these revised gross domestic product numbers, China has supplanted Italy as the world's 6th largest economy and is climbing rapidly.
China's National Bureau of Statistics Tuesday announced it had revised gross domestic product figures for 2004 upwards by 16.8 percent - after completing China's first national economic census.
The new numbers show China's economic output last year was almost $2 trillion - that is $285 billion more than had been estimated.
Chinese officials say better accounting of service industries - such as telecommunications, retailing, and real estate - made up the vast majority of the amended figures.
Li Deshui, China's Commissioner of the National Bureau of Statistics, told reporters here the new GDP shows China's economic structure is healthier than previously believed, but warns there are still many challenges to China's economic growth.
"Energy consumption is too high, consumption of other natural resources is excessive, and our investment and production rate is not ideal," he said.
Experts often question the accuracy of China's economic statistics. Mr. Li acknowledges some new services - such as computer, Internet, and leasing - are still not adequately accounted for, but he says the overall census reporting error margin was accurate within a one percent target.
Stephen Green, the senior economist for China at the Standard Chartered Bank in Shanghai, says while all Chinese statistics have problems, accuracy is improving and the revised GDP growth is good news for the Chinese economy.
"A lot of the ratios, which people cite when they talk about worries about China's fiscal problems or its banking problems or its over investment problems, all these ratios they improve now with the bigger GDP," he said.
China plans to continue to revise historical economic data back to 1993 on the basis of the revised census GDP figures which could reveal more information about China's historical economic growth.
Tuesday's announcement means China has replaced Italy as the sixth largest economy in the world. Experts say China may jump a few more spots to number four, when the 2005 GDP statistics are released next month.