China's Plans to Revise Its National Accounting System

New methods in China's national accounting system will better reflect the country's economic and social realities and help Beijing implement reforms while also softening the impact of slower economic growth down the line. The Chinese National Bureau of Statistics announced the changes, which were decided upon following the recently concluded Third Plenum, on Nov. 16. The new methodology will result in an upward revision of Chinese gross domestic product as the country's leadership attempts to change the public's expectations and emphasize the importance of moving beyond a focus on gross domestic product as the main measure of economic performance.

The announced changes came less than a week after a key policy document was released by the Third Plenum. The document, which offered a blueprint for the country's next phase of reform, stressed the need to phase out the traditional growth-oriented development model. The country's leadership is also emphasizing the importance of growing GDP through innovation and quality upgrades rather than through sheer increases in size and scale. China's leaders hope the accounting reforms and changes in perception will curb the politicization of statistics, a phenomenon that leads local officials to overestimate their region's economic growth.