China moves to fourth in global GDP rankings
(Reuters/chinadaily.com.cn)
Updated: 2005-12-14 08:53

Economists said an upward revision of 20 percent, as reported by the Hong Kong-based South China Morning Post, would be in line with their own estimates -- or could even be too modest.

A Shanghai port is seen in this photo taken on May 10, 2005. [newsphoto]

Chen Xingdong, chief China economist for BNP Paribas Peregrine in Beijing, said he would not be surprised if the NBS revised up its estimate of China's GDP, which totalled $1.65 trillion in 2004, by 15 percent to 20 percent.

China's number-crunchers have failed to capture the boom in small and medium-sized industrial enterprises, Chen said.

"We always argue that it has been largely underestimated for a long, long time," he said. "Even a number like 15 percent is not that large for us."

Dong Tao, chief economist for non-Japan Asia at Credit Suisse First Boston (Hong Kong) Ltd., said China's GDP would still be understated even if it was revised up by $300 billion.

"There's a massive under-reporting of GDP in the service sector," Tao said.

He cited the relatively low quality of data collection in China as one reason for that. Economists have long pointed to shortcomings in China's statistics, due to a central planning legacy that put priority on collecting data on the production of physical goods from state-owned enterprises.

Tao said another reason was that many service enterprises fall through the statisticians' net because they fail to report income for tax reasons.

"Just take a walk into any restaurant in Shenzhen or Beijing. If you buy a meal without asking for the receipt, for tax reasons these things will not be in China's GDP," he said.

France came fifth in the World Bank's rankings, with 2004 GDP of $2.00 trillion, and Italy sixth, with output of $1.67 trillion. The United States, followed by Japan and Germany, topped the list.