China may add R&D expenditure to GDP calculation

(ECNS) – China is considering adding research and development expenditure to its GDP calculation for the first time.

The National Bureau of Statistics has finished the draft plan and will submit it to the State Council by year end for final approval.

The new inclusion would boost the size and growth rate of China's GDP and promote innovative activities.

The US revised its GDP accounting in 2013 to include R&D expenditure and original works of art as long-lived assets, causing its 2012 GDP to increase by 3.6 percent compared with the original calculation.

Statistics show that China spent 1.19 trillion yuan ($192 b) on R&D in 2013. Experts say that if three fourths of that expenditure were counted into GDP, its size would have swelled by 1 trillion yuan ($160 b).

Peking University economist Cai Zhizhou said the change could also widen the GDP gap between China's developed areas and the underdeveloped western region. Big cities like Beijing spend more than 6 percent on R&D, while western provinces only have 1 percent or less in R&D input.