Shoppers get into the Christmas spirit at a shopping mall in Beijing. China will leapfrog Italy, France, and Britain to be officially recognized as the world's fourth-biggest economy if, as expected, it revises up its 2004 gross domestic product by nearly US$300 billion, analysts said. [AFP]

BEIJING, Dec. 19 -- China will leapfrog Italy, France, and Britain to be officially recognized as the world's fourth-biggest economy if, as expected, it revises up its 2004 gross domestic product by nearly US$300 billion, analysts said.

    "As if China's economy was not growing fast enough, thanks to a statistical revision, growth in 2005 looks like being about 30 percent," Standard Chartered economist Stephen Green said in a research note.

    China's National Bureau of Statistics is expected to announce Tuesday the results from the country's first nationwide economic census, which, according to Hong Kong's South China Morning Post, will show that China's GDP has been understated by some US$300 billion.

    "The recent national economic survey has apparently found another 2.4 trillion yuan (US$296 billion) worth of output," Green said.

    The new-found figure is equivalent to 17.5 percent of last year's GDP.

    "Most of the extra output is in services since the statistical apparatus is not that good at measuring the sector," Green said.

    "The change will also affect our understanding of investment. It is still growing fast, but the economy should become a little less dependent upon it."

    Officials from the statistics bureau refused to comment, but a spokeswoman from the cabinet-level China Economy Census Office, the office that took the census, told AFP that such media reports were "baseless."

    "The specific GDP figures will be published on December 20. What has been reported in various media is baseless," the spokeswoman, who refused to identify herself, told AFP.

    Green said the revised figures would greatly bolster per capita GDP, while lowering China's external debt in terms of its percentage to GDP as well as the country's burdensome non-performing-loan/GDP ratio.

    "The IMF (International Monetary Fund) was looking for domestic debt at year-end 2005 to be worth 19.6 percent of GDP. That can now be revised down to about 16 percent," Green said.

    Other analysts agreed that the revised figures would allow the Chinese government to spout more good news about its booming economy, but expressed caution about the intentions behind the move.

    "They are making this announcement for two purposes. The government has been criticized for over-investment, so this will make the investment a smaller percentage of GDP," Andy Xie, chief Hong Kong-based economist for Morgan Stanley, told AFP.

    "Also they want to sustain optimism, especially optimism among foreign investors."

(Source: China Daily/AFP)