China Plans to Add Research Development Spending Into GDP
Bareksa • 02 Jul 2014
Workers load bags of chemicals onto a ship for export at a port in Lianyungang, Jiangsu province - (Reuters/China Daily)
In 2013, the United States revised the way it calculated gross domestic product by including R&D spending.
Bareksa.com - China plans to include what it spends on research and development (R&D) as part of its methodology for calculating economic growth and the change may be adopted next year, the 21st Century Business Herald reported on Wednesday.
The National Bureau of Statistics has completed drafting the plans and will submit it to the cabinet for approval later this year, the newspaper said. The R&D spending will be counted as investment rather than as business costs.
The statistical bureau will revise historical gross domestic product (GDP) figures in the past decade to make them consistent, it said without elaborating.
The new way of calculating GDP will have limited impact on annual economic growth, probably affecting the result by less than 1 percentage point, the newspaper said.
But it may boost the size of economic output in China's more developed coastal provinces and cities such as Beijing and Shanghai - where R&D spending is bigger, it added.
"The impact on annual economic growth will be limited," Zhu Baoliang, chief economist at State Information Centre, a top government think tank in Beijing who has been involved in studying the statistical change.
"We have been studying it for a long time but the implementation could be more complicated," he told Reuters.
Research and development spending in China reached 1 trillion yuan ($161 billion) in 2012, about 2 percent of its GDP, government data shows.
R&D expenditure as a percentage of GDP is viewed as an important indicator to evaluate a country's investment in innovation. R&D spending as a percentage of GDP in China was 1.54 percent in 2008.
In 2013, the United States revised the way it calculated gross domestic product by including R&D spending.
Meanwhile, the statistical bureau has said it will unify the way it calculates provincial economic output to help close a gap with national figures, the country's chief statistician said on Tuesday, amid scepticism about the reliability of Chinese data.
The combined economic output of China's provinces has long exceeded that of the national level compiled by the bureau, raising suspicion that some growth-obsessed local officials have cooked the books.
Chinese leaders have recently set new standards for local officials, stressing that their performance cannot be simply based on regional growth rates, but should include resource and environmental costs, debt levels and work safety. (Source : Reuters)