Sectors like mining, agriculture, and equipment repair will be, however, out of the index’s reach as “good” data from these industries can be difficult to get. (Photo : Getty Images)
As the economy shifts from manufacturing to consumption, China has released a new measure to gauge China’s growing service economy: the Index of Services Production, The Wall Street Journal reported.
In its maiden release, the Index of Services Production indicates the service economy in China rose by 8.2 percent in January and February, according to the National Bureau of Statistics.
China’s Index of Services Production noted that railway transportation, media, communications, and the Internet were some of the sectors that recorded strong activity in the past months. The index then combined figures from January and February in consideration of the Lunar New Year holiday, which dates vary and may lead to data confusion.
“We need a composite index to fully grasp short-term changes in the services industry,” Sheng Laiyun, a spokesman for the National Bureau of Statistics, told reporters last Tuesday, March 14.
According to Sheng, companies and economic planners will find the index particularly useful as it tracks output including the associated costs.
Sectors like mining, agriculture, and equipment repair will be, however, out of the index’s reach as “good” data from these industries can be difficult to get.
The Index of Services Production, although just released, has already gained some detractors, with most critics confused as to how the gauge compiles its data.
“It is difficult to judge this index because the [National Bureau of Statistics] released limited information about its methodology and no information on its history,” Goldman Sachs wrote in a research note, according to WSJ.
In addition, experts say that the service industry and their contribution to an economy’s growth or decline are hard to measure. Most of the key players in the sector are often small companies and businesses which often change or, worst case scenario, go out of business within a short period of time.
