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The results of the first national economic census have been released, indicating the Chinese economy is moving forwards more healthily than previously thought.

The figures show the country's GDP in 2004 reached 15.99 trillion yuan (US$1.972 trillion) 2.3 trillion yuan (US$284 billion) more than the initial calculation, or a 16.8 percent increase.

Of all the sectors, GDP contributed by tertiary industries the service sector increased by 6.5 trillion yuan (US$801 billion); 2.13 trillion yuan (US$263 billion) more than originally forecast.

As a result of the revision of the economic statistics, the proportion of the economy made up by agriculture, traditional industries and tertiary industries is 13.1 percent, 46.2 percent and 40.7 percent, respectively. The shares of the primary and secondary industries dropped by 2.1 and 6.7 percentage points respectively, while that of tertiary industries rose by 8.8 percent.

The figures indicate that the size of the economy increased and that economic structure became more rational.

Besides showing the increase and structural improvement, the statistics demonstrate the general tendency of the economy more accurately.

In short, while facilitating taking stock of past achievements and mastering development at present, the census shows the direction in which the economy will move in future.

The changes in the contributions of different sectors to national GDP, as shown by the census, are of great significance to the formulation of future macroeconomic policies.

The census provides a large amount of information about the status quo of the country's secondary and tertiary industries, verifies the general economic volume of the nation and the tertiary industries' bigger share of the economy.

By coincidence, recent research conducted by economists from Germany's Rhine-Westphalia Economic Research Institute indicates the proportion of GDP made up by tertiary industries is 41.1 percent strikingly similar to the ratio offered by the census. This helps prove the structural changes taking place in the Chinese economy are in accord with general economic laws.

The census outcome, indicating the Chinese economy is more rationally structured, will provide a basis for decision-makers as they map out economic policies. This is especially important as the central authorities are working on the 11th Five-Year Plan (2006-10). The latest data collected by the census is expected to be used in the course of formulating the new five-year plan.

In addition to the data about the general size of the economy and the proportions different sectors account for in the economy, basic economic data and materials were obtained through the census. For example, catalogues of the economic entities in the secondary and tertiary industries and corresponding databanks were set up, with first-hand information about all of the entities being entered into the databank of the National Bureau of Statistics.

All this information has not only been used to form a general economic picture, but is also grouped according to subcategories to be studied and analyzed. This helps the international community, as well as facilitating Chinese enterprises' decision-making and the State in its formulation of macro-economic policies.

A complete set of statistical methods, measures and institutions were formed through conducting the census, which will help raise the authoritativeness of Chinese statistical undertakings. Relying on the figures acquired in this census, different localities will be able to access first-hand material and data, and calculate their local GDP. This will facilitate reducing the difference between the national GDP, which is calculated by the central authorities, and the sum of local GDP figures. The mismatch between the two, which has been a chronic headache, is expected to be resolved.

Over the years, the growth of the Chinese economy has been defined as of the investment-driven type while the role of consumption has been largely overlooked. The new figures acquired through the census, however, indicate that the growth pattern of the Chinese economy is much more rational and healthier than the original statistics showed.

Many factors that were deemed to be haunting economic development are not as serious as we imagined. With the upward revision of GDP, the indicators of investment rate, consumption rate, degree of reliance on foreign trade, energy consumption for producing each unit of GDP, ratio between loans and GDP and others will be revised down.

It follows that the Chinese economy's stability is better than initial calculations suggested and that consumption's support for the economy is much stronger than originally believed.

All this will boost decision-makers' confidence in continuing to raise consumption demand.

In the past, investment's high ratio to GDP growth was regarded as clear evidence of excessive investment and considered a threat to the health of the economy. The census, however, shows that the ratio of the investment in fixed assets to GDP has dropped from 51.3 percent to 43.8 percent below the threshold that was deemed acceptable in the 1950s when the country went all out for national industrialization.

The degree of reliance on other economies has dropped somewhat. The reliance index was 69.8 percent in 2002 but this figure was revised down to 59.8 percent, a 10-percentage-point drop. This shows that the Chinese economy is not as dependent on the outside world as analysts had believed.

With the upward revision of GDP volume, the energy consumed for producing each 10,000 yuan (US$1,230) of GDP dropped from 1.58 tons of standard coal to 1.35 tons a decline of 15 percent.

Note: the author is a researcher from the Economic Forecasting Department of the State Information Center.

(China Daily December 30, 2005)