NBS considers updated GDP methodology
The nation may revise how it calculates the role of the robust "new economy" in boosting GDP growth, an official from the National Bureau of Statistics (NBS) said in a forum in Beijing over the weekend.
GDP growth has been declining since 2011, but the fast-growing "new economy" has played an important role in offsetting the downward pressure facing traditional sectors, Xu Xianchun, deputy director of the NBS, told the forum during a speech, according to a report on news portal yicai.com.
The "new economy," including emerging sectors like environmental protection and information technology, is beating the performance of traditional industrial sectors, Xu said.
For instance, the aggregate growth of added value in emerging industries like the environmental protection, information technology and bio-industry sectors was 10 percent in the first quarter, 4.2 percentage points higher than the overall performance of major industrial companies, he said.
The growth figure for manufacturing related to aeronautics and astronautics was 28 percent during the period, Xu said.
China's GDP growth slowed to 6.7 percent in the first quarter, the weakest in 28 quarters.
Xu noted that the "new economy" will play an even bigger role in boosting the country's growth. Currently, growth in that part of the economy is still not enough to fully counter the downward pressure in traditional sectors, but that will change and the economy will stabilize, he said.
However, Xu noted that globally there is still no standard definition of the "new economy" and how it can be calculated, posing challenges to the statistics work of the government.
For instance, the robust "sharing economy" is an important part of the "new economy.". But the fact that transactions in "sharing economy" mainly involve individuals makes it hard for the statistics department to collect data, according to Xu.
Economists in the U.S. and Europe have debated whether the "new economy" is underestimated in calculating GDP. Unlike traditional industries, emerging industries such as software, information and online consumption are likely to be undervalued, Liu Xuezhi, a macroeconomist at Bank of Communications, told the Global Times on Sunday.
"It's obvious that the old methodology designed for calculating industrial output has to be replaced for new sectors, for example online shopping," he said, noting that some new sectors have not been fully included in the GDP calculation yet.
But unlike certain industrial products, there is no "market price" for some new sectors -- for example, the emerging services sector related to the Internet, Liu noted. "It may be challenging for the government to come up with a new methodology," he said.
Liu estimated China's GDP growth was flat at 6.7 percent in the second quarter, according to a research note from the Bank of Communications sent to the Global Times on Wednesday. The second quarter GDP will be announced on July 15, the NBS said.
