Life appears easier for the average Chinese. People can find handy restaurants known for different flavors in most streets, while the shelves of many stores and malls are often full of goods from all over the country.

This is a big improvement from a quarter-century ago, when China kicked-off its reform and opening-up drive, and the government inspired a flood of laid-off workers from state companies to get engaged in underdeveloped service activities.

Tuesday's official figures demonstrated the trend as China's top statistician Li Deshui announced the country's economic output in 2004 was revised by as much as 16.8 percent, contributed to primarily by under-reported service sector output.

Last year's gross domestic product should be 15.9878 trillion yuan (about 2 trillion U.S. dollars), 2.3 trillion yuan more than previously reported, Li said, citing results from the latest national economic survey.

Nearly all -- 93 percent -- of the extra part came from the tertiary sector.

Li acknowledged at a press conference of the Information Office of the State Council the statistical system developed under the centrally-planned days was out-of-date, "resulting in very weak figures from the service sector."

Meanwhile, the mushrooming new service sectors and privately run firms increased the difficulties for data collection.

"As a statistical department, in fact, we had already known about the underestimated output of service sector," he said. "The economic survey proved our initial judgement. We feel pleased that the new figures point to a more reasonable and healthier Chinese economy."

Li said the economy, now overtaking Italy as the world's 6th biggest after the revision, was helped by the service sector, rejecting the prevailing view among economists that it is largely fueled by the booming manufacturing industry and strong exports.

"The contributions from the service sector should not be forgotten," the official said. The ratio of the service industry in GDP was revised to 40.7 percent from 31.9 percent announced in January this year.

The GDP share of the secondary sector -- industry, manufacturing and mining -- fell to 46.2 percent from 52.9 percent. The share of the primary sector -- farming, forestry and fisheries -- shrank to 13.1 percent from 15.2 percent.

The survey also found small firms, including township enterprises, have been exaggerating their output figures which analysts say was meant to help local governments and officials "showcase their political achievements and seek promotion."

Liang Hong, an economist with Goldman Sachs Beijing office, said in an interview with Xinhua that the survey shows "many factors said to beleaguer the Chinese economy are not that serious."

She cited that investment has been reckoned as excessive in China, but the new data shows its ratio to GDP fell to 39 percent -- actually a "balanced" level needed to help the Chinese economy grow at a rate of 9 to 10 percent -- from 44 percent last year.

Chief economist Tang Min with the Beijing office of Asian Development Bank said Tuesday's figures from the National Bureau of Statistics are "fairly more authentic."

He echoed the remarks by Li Deshui, who said China's economic growth still has low efficiency.

China's revised GDP accounts for a mere 4.4 percent of the world's total, but was achieved on 7.4, 31, 27 and 40 percent of the global oil, coal, rolled steel and cement consumption, respectively.

Now economists have started wondering whether the service sector, which has already "increased" in size in line with the survey, can further soak in the surplus labor force and a large number of new job seekers, a centerpiece effort by the Chinese government.

But Li Deshui played down the concerns, saying that the GDP share of the service sector remains "not high," climbing only to the average of developing nations, far lower than the 75 percent recorded in the United States and more than 60 percent in Britain, France, Germany and Japan.

"To speed up the development of the tertiary industry is still an important task," Li said

Asked whether a revised GDP could bring more pressure on China's exchange rate reform, Li noted that the 2 percent revaluation of renminbi on July 21 was already "a big step forward and key reform plan, full of wisdom."

It has been less than half a year since the revaluation effort and "we cannot change the rate frequently," he said.

"The policy will be maintained for a long time. The exchange rate policy is prudent."

Li stressed the result from the survey will not affect the nation's macro-economic policy.

"The international community should not reckon that China suddenly becomes much stronger just on the back of some changes in economic figures," he said. "It should be treated calmly."

Li said the National Bureau of Statistics would be revising the annual GDP growth rates back to 1993 in light of the findings from the survey, for which it recruited more than 3 million supervisors and enumerators.

Source: Xinhua