Chinese statistical officials said Monday that apparently contradictory economic growth and energy data were being misunderstood, and that the divergence in the rates of change reflected a shift in the country´s industrial structure.

The National Bureau of Statistics (NBS) made its comments in response to doubts expressed by an unnamed international organization. According to the Wall Street Journal, the International Energy Agency (IEA) has said that China´s reported first-quarter 6.1-percent expansion in gross domestic product (GDP) didn´t tally with a 3.5-percent drop in oil demand and weak electricity demand.

"The report lacked evidence and some viewpoints were cited from private consulting organizations, which reflected a lack of seriousness," the NBS said on its website.

The bureau said it was incorrect to compare oil and power demand with overall economic growth and doing so represented the mistake of comparing the part with the whole. First-quarter energy consumption rose 3 percent, which was in the same direction as GDP growth, it said.

As to why industrial output grew and yet electricity consumption fell, the NBS said this situation reflected the change in industrial structure and slowed production by energy-intensive sectors.

It said more economic growth had come from sectors that were less energy-intensive and less growth had come from traditional heavy industry.

First-quarter power consumption fell 4 percent to 781 billion kw/hrs from a year earlier. Industrial output grew 5.1 percent year on year.

The NBS said the output of tertiary industries, which are not major electricity consumers, grew 7.4 percent in the first quarter, which was 2.1 percentage points higher than the output of heavy and light industry.

Output of tertiary industries contributed to 44.3 percent of GDP, up from 42.7 percent a year earlier. Output of heavy and light industry accounted for 44.1 percent, down from 46 percent.

In the first quarter, the output growth rate of the six most energy-intensive sectors (iron and steel, nonferrous metals, building materials, petrochemicals, coking and chemicals), which comprised about 63 percent of total industrial output, fell 12.5 percentage points on average from a year earlier, to 2.3 percent, it said.

Electricity use in these sectors declined 3.7 percent, a sharp reversal from growth of 13.2 percent a year earlier.

Meanwhile, low-electricity consuming sectors had strong output growth, such as a 34.7-percent rise in the manufacturing of communication switching equipment, a 14-percent gain in the production of medical chemicals and an 11-percent expansion in the medical equipment manufacturing sector, the NBS said.

Zhang Liqun, a researcher with the Development Research Center of the State Council, a government think-tank, said earlier this month in an article that China continued to gear economic growth to rely more on light industry and less on heavy industry.

He said the decline of electricity consumption by heavy industry, which accounts for 82 percent of total industrial power consumption, was the leading cause for the overall decline.

The NBS said the divergence between GDP growth and power consumption also occurred in other countries. For example, electricity consumption in the United States fell 3.6 percent in 2001 while its GDP grew 0.8 percent. Japan saw a 1.3 percent drop of power consumption in 2003 but a 1.8 percent rise in GDP.

The IEA report also cast doubt on figures such as the 6.1-percent GDP rise in the first quarter and the 24.9-percent slump in foreign trade. The NBS said both figures were accurate, but it was a mistake to compare exports with GDP in isolation.

GDP growth was boosted by investment, consumption and external demand. It was normal for GDP to grow with one sector falling, the NBS said.

It added the 6.1 percent growth was supported by domestic demand as the country hammered out a series of stimulus plans since last November, which accelerated investment and buoyed consumption.

China has previously faced questions about the accuracy of its economic data. As a step to improve the credibility and protection of statistics, the government formulated new rules imposing penalties for publication of fraudulent statistics or unauthorized dissemination of statistical data, which took effect May 1.

Source: Xinhua