As part of its economic reform plan, Beijing has committed itself to delivering economic data that meets international best practices after doubts have emerged that the country's growth figures might not reflect reality.
The International Monetary Fund (IMF) announced Wednesday that China would introduce Special Data Dissemination Standard (SDDS), calling the decision "a major step forward for official statistics."
Beijing's participation "underscores China's strong commitment to transparency as well as to the adoption of international best practices in statistics," said David Lipton, IMF first deputy managing director.
China's official news agency Xinhua on Thursday confirmed the country's acceptance of the statistical benchmark, quoting an official of China's central bank as saying: "The adoption of SDDS is a necessary step in reform and opening up, which will further improve China's statistical transparency, credibility and comparability among different economies."
Yi Gang, deputy governor of the People's Bank of China, told Xinhua that the move was not only "crucial for our own policy" but also beneficial for a "better understanding of the Chinese economy by the outside world."
China is the 65th country to subscribe to the IMF's highest economic data standards. Beijing's agreement to SDDS comes amid increasing doubts about official Chinese government data on growth and employment.
In the first two quarters of 2015, Beijing said gross domestic product (GDP) had expanded almost exactly in line with the government's GDP target of 7 percent in spite of an apparent slowdown in the world's second-largest economy.
IMF warns on transition risks
The adoption of SDDS is part of Beijing's effort to base the Chinese economic model on greater domestic spending after decades of double-digit growth fuelled by investment and exports.
However, the IMF warned Wednesday that the transition was fraught with "unprecedented challenges" that would require "great care." In its Global Financial Stability Report, the Washington-based crisis lender noted that "if not handled well from a policy viewpoint, the cost to the world economy of the emerging market downturn could be a huge three percent of global output."
The author of the report, IMF Financial Counselor Jose Vinals, said in the worst case scenario, corporate default rates could rise, particularly in China, "raising financial system strains" which could pose a severe risk for emerging economies seeing their credit grades lowered to non-investment grade or junk status, as in Brazil a month ago.
The IMF report specifically mentioned challenges arising from its old centrally planned system, including the banking sector which had only just begun to deal with growing loan problems as a result of struggling companies.
Beijing brushes off concerns
Following IMF's warning, Beijing has sought to downplay concerns that the country's economic transition would pose a risk to the global economy.
Central bank deputy governor Yi Gang said: "I would say, don't worry. China will still have pretty much middle-to-high growth in the near future."
On the sidelines of a G20 meeting starting in the Peruvian capital Lima on Thursday, he reassured emerging economies - many of them commodity exporters - that Chinese imports of raw materials for its industrial economy would "grow steadily in the future."
uhe/sri (dpa, AFP)