BEIJING: In a surprising turn of events, China has revealed that its gross domestic product (GDP) for 2023 has been adjusted upward, thanks to a significant overhaul in how the housing sector is measured.

This revision, announced on Friday, adds fuel to the debate about the health of China's economy, and it could have implications for the 2024 GDP figures as well—though experts assert that it won't greatly alter the growth rate.

On Thursday, the National Bureau of Statistics (NBS) disclosed that China's GDP has been increased by a staggering 3.4 trillion yuan (approximately US$500 billion), which is a growth of 2.7%, bringing the total to 129.4 trillion yuan (US$17.73 trillion). However, the bureau initially provided little to no detail about what sparked this dramatic change.

Further clarification came on Friday, with the NBS explaining that the shift from a housing cost calculation to one based on rental values was the primary catalyst for the adjustment. The new method resulted in an added 1.34 trillion yuan to the economic contribution of housing services for the year, a significant uptick from previous calculations.

Historically, rental data in China has been patchy due to the country's evolving rental market. Consequently, the NBS resorted to a 'housing cost method,' which was flawed as it considered the depreciation of properties over time, alongside various expenses such as maintenance and taxes. The outdated method underestimated the actual contribution of housing services to the economy.

Moreover, the revision revealed that the share of tertiary industries—spanning sectors from retail to finance—now accounts for 56.3% of economic output, marking a 1.7 percentage point increase from earlier estimates. This change underscores the growing importance of service-oriented industries in China's economic framework.

Despite these upward revisions, China's economy continues to grapple with substantial challenges. The nation has faced headwinds in the form of an ongoing property crisis, soaring local government debt, and weak consumer demand.

In light of these economic pressures, Chinese leaders are already strategizing for 2024, including plans to increase the budget deficit, issue more debt, and implement looser monetary policies.

Next year, authorities have projected the issuance of 3 trillion yuan in special treasury bonds—an unprecedented amount that aims to stimulate growth amidst the looming threat of escalating trade tensions with the United States under President-elect Donald Trump.

In conclusion, while the upward revision of China's GDP offers a glimmer of hope amidst economic struggles, it serves as a reminder of the complex dynamics influencing the nation's financial landscape.

Will these measures be enough to propel growth in 2024? Time will tell!