Measurement of Services Sector Statistics in the People’s Republic of China: How can They be Improved?

Abstract

The People’s Republic of China (PRC) is one of the fastest growing economies in the world. It has achieved very high gross domestic product (GDP) growth rates over more than two decades. Because of the PRC’s size and its impact on the world economy, its national accounts estimates have been highly scrutinized by experts over the years. Questions have been raised about the accuracy of official estimates of GDP level and growth rates. The services sector presents a particular cause of concern because of the lack of regular and reliable statistics on service activities. The consequence of this is that official estimates of services sector value-added have been underestimated in the past. This paper discusses present practices in compiling statistics on the PRC’s services sector, identifies gaps and weaknesses in the computation of data and in the estimation procedures being used, and makes recommendation for improving estimates of the services sector in the PRC.