Speech at the Press Conference on 2003 GDP Figures

Ladies and gentlemen,

Good Morning.

On the forthcoming of the traditional Chinese Spring Festival, we are very glad to have this opportunity to get-together with our friends from the media. I would like to extend New Year Greetings to all of you, wishing you good health, successful career and good luck. I look forward to closer cooperation between statistical agencies and the media to better serve the public.

I. Open-door Policy on GDP Estimates Evaluation

This is the first news conference since National Bureau of Statistics initiated its reform in GDP accounting and data dissemination system. In the aim of further increasing the transparency of the GDP accounting, improving the accuracy of GDP figures, demonstrating a real picture of the national economic performance and better serving macro-economic policy makers and the public as well, National Bureau of Statistics made serious evaluation first among experts within the Bureau. On January 17, 2004, National Bureau of Statistics invited government officials from National Development and Reform Commission, Ministry of Finance, People’s Bank of China, State Administration of Foreign Exchange and also experts and scholars from the Chinese Academic of Social Sciences, BeijingUniversity and People’s University to evaluate the preliminary GDP estimates. During the discussion, all the participants enthusiastically aired their own views. They fully confirmed the accounting methods adopted by National Bureau of Statistics, and were satisfied with the preliminary GDP estimates for the year 2003. At the meantime, they also shared with us their opinions and suggestions on further improvement of GDP accounting. It is the very first time for National Bureau of Statistics to have an open discussion of the GDP accounting; so it is very important and bears far-reaching impact. We will continue the open discussion on GDP estimates in the future and make it a regular practice.

II. Preliminary Estimation on 2003 GDP

According to preliminary estimation and evaluation, the Gross Domestic Product of China in 2003 was 11.6694 trillion yuan, up 9.1% over the previous year according to comparable prices, representing the highest growth since 1997. It was a hard-won successful achievement after the outbreak of SARS epidemic and frequent natural disasters. According to current exchange rate, the GDP of China in 2003 was equal to over 1.4 trillion US dollars, with the per capita GDP reaching 1,090 US dollars.

In terms of different industries, the value-added of the primary industry was 1,724.7 billion yuan, up 2.5%, or 0.4 percentage points lower than the growth in the previous year. The value-added of the secondary industry was 6,177.8 billion yuan, up 12.5%, or 2.7 percentage points higher. The value-added of the tertiary industry was 3,766.9 billion yuan, up 6.7%, or 0.8 percentage points lower.

In terms of different quarters, the growth of GDP was 9.9% in the first quarter, 6.7% for the second quarter, 9.6% for the third quarter after revision as compared with the previously released figure of 9.1%, and 9.9% for the fourth quarter.

III. Improving and Standardizing Regional GDP Accounting

       In order to calculate and use the GDP figures in a more scientific way and to follow internationally accepted practices, National Bureau of Statistics has decided, with the approval from the State Council, to carry out the following measures to improve and standardize the regional GDP accounting starting from 2004.

Firstly, improving the accounting method of regional per capita GDP. Per capita GDP refers to the ratio of GDP with the average population in a given period. According to international convention, the population refers to the permanent population in the give period. It is also stipulated in the national account system of China that while estimating per capita GDP at national or regional level, the population used in the calculation should be the permanent population. In practice, however, the population figures used by different regions in calculating per capita GDP are inconsistent due to various reasons. Some regions still use the population figures from household registration, while others use the permanent population. With the further deepening of reform and opening-up, population flow among regions is becoming more frequent; the gap between the registered population and the permanent population is widening. It is difficult to truly reflect the real situation in a given region by using registered population to calculate per capita GDP, as it will influence the comparability and accuracy of the results across regions. In order to calculate accurately the regional per capita GDP and to ensure the comparability among regions, it is decided that all regions should use the permanent population in the calculation of per capita GDP, and that revisions should be made with regard to historical data accordingly. For those regions where registered population was used in the past, calculation of per capita GDP for the next two years could be performed by using both registered population and permanent population as transitional approach. After two years, the per capita GDP based on registered population will be abolished.

Secondly, standardizing the Chinese translation of regional GDP and related indicators. GDP refers to Gross Domestic Product in English, and the word “domestic” could cover the meaning of national, local or home-related. The Chinese translation of the term, i.e. guonei shengchan zongzhi carries with it a “national” concept, irrespective of whether the indicator is referring to the production of a national or a region. Some experts and scholars question that it is not appropriate to use the same Chinese term for both national and regional GDP, because the term Guonei in Chinese do not have the meaning of “local” as the word “domestic” has in English. Statistical agency in Hong Kong SAR translated it into local gross product. In order to have a precise and standardized terminology, the expression of regional GDP in Chinese will be adjusted as such: regional GDP should be called diqu shengchan zongzhi (regional gross product). GDP for a specific region would be called “XX province gross product” or “XX province GDP” in short. Local GDP in general would be called gedi shengchan zongzhi (local gross product).

In addition, National Bureau of Statistics has distributed its No. 70 document in 2003 to all regions, which stimulates that the preliminary annual GDP estimates of each province, autonomous region or municipality should not be release till January 15 the next year, and estimates of the quarterly GDP should not be released till the 10th day after the quarter. It is also stipulated that no monthly GDP estimates will be released in the future.