China Revises 2023 GDP Citing Updated Housing Metrics
China Revises 2023 GDP Citing Updated Housing Metrics

China Revises 2023 GDP Citing Updated Housing Metrics

lucadelladora – China has revised its 2023 gross domestic product (GDP) upward. Citing changes in the calculation methods for the housing sector. The National Bureau of Statistics (NBS) announced on Friday, December 27, that the adjustment adds 3.4 trillion yuan (US$466 billion). Bringing the total GDP to 129.4 trillion yuan (US$17.73 trillion), an increase of 2.7%.

The updated GDP figure reflects methodological improvements in assessing the housing sector’s contribution to the economy. While the revised metrics alter the overall economic size for 2023 and will influence 2024’s baseline. They are not expected to significantly affect China’s growth rate, according to officials.

The NBS initially released the revised figure without explanation but later clarified that the adjustment stemmed from a more comprehensive evaluation of housing market activities. This move aligns with China’s ongoing efforts to improve the accuracy of its economic data and better capture contributions from various sectors.

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China Revises 2023 GDP by 2.7%

China’s National Bureau of Statistics (NBS) announced on Friday a 2.7% upward revision to its 2023 GDP. Raising it by 3.4 trillion yuan (US$466 billion) to 129.4 trillion yuan (US$17.73 trillion). This adjustment reflects the adoption of a new method for calculating the housing sector’s contribution to the economy.

The NBS stated that it now uses rental values instead of the previous “housing cost method” to determine the output of housing services. This methodological change alone increased the housing sector’s contribution to GDP by 1.34 trillion yuan in 2023. The shift was made possible as China’s rental market matured. Providing more comprehensive data to enhance the accuracy of economic measurements.

Previously, the housing cost method calculated property value based on depreciation, maintenance costs, management fees, and taxes. Often undervalued housing services due to limited rental data. The updated approach aligns more closely with international standards and reflects the growing importance of rental activity in China’s economy.

The bureau emphasized that while the revision affects the overall size of the economy for 2023 and sets a higher baseline for 2024. It does not significantly alter the GDP growth rate. The change is part of ongoing efforts to refine statistical accuracy and ensure reliable economic data for policymaking.

Reflects Stronger Tertiary Sector Growth Amid Economic Challenges

China’s National Bureau of Statistics (NBS) announced that tertiary industries accounted for 56.3% of the country’s economic output in 2023. Following the recent GDP revision. This marks a 1.7 percentage point increase compared to preliminary data, contributing significantly to the GDP’s upward adjustment to 129.4 trillion yuan (US$17.73 trillion).

The tertiary sector, which encompasses industries like retail, transport, finance, catering, accommodation, and property, played a pivotal role in boosting economic performance. This shift underscores the growing importance of services in China’s economic structure.

Despite these adjustments, China’s economy faced headwinds in 2023, including a prolonged property market crisis, mounting local government debt, and weak consumer demand. Acknowledging these challenges, Chinese leaders outlined measures to stabilize the economy at this month’s agenda-setting meeting.

The government plans to increase the budget deficit, issue additional debt, and adopt looser monetary policies in 2024. Among these measures is the issuance of a record 3 trillion yuan in special treasury bonds, aimed at bolstering infrastructure investment and stimulating growth.

Economic policymakers are also preparing for potential trade tensions with the United States, as President-elect Donald Trump assumes office in January. These fiscal and monetary strategies reflect China’s commitment to sustaining growth amid complex global and domestic conditions.

The GDP revision, alongside targeted economic reforms, highlights China’s focus on adapting to changing economic dynamics while maintaining stability in the face of global uncertainties.