The fundamental message remains unchanged.
- China is a large economy, ranked #6 in 2004, between France and Italy (Ranks: USA, Japan, Germany, UK, France), and can catch up with Germany and Japan in the next decade of two. But it is still a developing country, with GDP/cap under $2000, 1/20 that of USA.
- Since the change of methodology does not change the growth number significantly (what has missed in 2004 was also missed in 2003), the trends (growth numbers) are still correct. i.e. the growth would be 9.0% or 10.0%, instead of 9.4%, depending on how much the missed 'service sector' has grown.
- The survey also confirms some long-held suspicions about China's economic make-up: that its service sector is bigger than the one-third of GDP suggested by the old figures (the new data show more than 40%)
- that consumption is also higher and that investment and savings as a proportion of GDP are lower. This lot of figures look more sustainable than the old lot. But they are still only a best guess at the truth. And, at a sixth the size of America's, China's economy still has a bit of catching-up to do
I would also add a couple more, the trade surplus as a percentage of GDP is smaller than previously thought, so is the forex reserve/GDP number, or saving/income rate. In particular, my export market share needs to be recalculated.With the service % now at 40.3%, China's color code is change to the same as India's, although India still leads by about 9-10 percentage points.