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The method of the GDP calculation has been reconsidered in China. In 2017 the Russian Eurobonds might be placed in CNY

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The method of the GDP calculation has been reconsidered in China. In 2017 the Russian Eurobonds might be placed in CNY

The method of the GDP calculation has been reconsidered in China. In 2017 the Russian Eurobonds might be placed in CNY
July 06
16:00 2016

The Chinese National Bureau of Statistics made the announcement about the changes in the basis for calculating GDP, with the result of which the volume of the economy for the last year has been increased by approximately $ 130 billion, says the South China Morning Post.

The Statistical Office has been using a new method that “would better reflect the contribution of innovations to the economic growth.” The expenditure on the scientific research and development activities, which could bring economic benefits to enterprises, today will be calculated as not the intermediate consumption, but as fixed capital formation.

The Bureau is going to use this method for the GDP calculating in the future and has already made the conversion of all the indicators since 1952.

The rate of the GDP growth, which was obtained as a result of the recalculation, has slightly changed. For example, the estimate of the growth of China’s economy in the previous year remained unchanged at 6.9%, showing the increase by only 0.04 percentage points if compared to the announced on the eve indicator.

Despite this, the size of China’s economy has grown after recalculation by 1.06% over the last ten years, including the last year rate that increased by 1.3%.

The rise of China’s GDP in 2008 now is being revised to 9.7% from 9.6%, in 2009 – to 9.4% from 9.2%, in 2010 and 2011 – was preserved at the level of 10.6% and 9 , 5% respectively, in 2012 – was increased to 7.9% from 7.7%, in 2013 – to 7.8% from 7.7%. The assessment of the economic growth remained unchanged in 2014 – 7.3%.

Meanwhile, Russia plans to place bonds in the national currency of China. The chance for the placement of Eurobonds in CNY is there in 2017, said Sergey Storchak, Deputy Finance Minister of the Russian Federation.

“Yes, there is a potential chance. At least, the regulators of the two countries – the Central Bank and the Securities Commission of the People’s Republic of China are doing something for this. They are adapting the infrastructure of our financial markets. The infrastructure plays a key role here, but not only the demand. There is a demand from both sides. There is a proposal from both sides “, – said Storchak, giving an answer to the question about the possibilities of bonds placement next year.

In November last year the Russian Ministry of Finance for the first time made a statement regarding plans to place bonds in CNY of approximately one billion US dollars at the Moscow stock exchange in the current year. This amount is equivalent to about six billion Yuan.

Later, in March this year, the director of the department of state debt and state financial assets of the Ministry of Finance Konstantin Vyshkovsky said that then there were no prerequisites for the placement of that instrument in 2016. Specifically, it was about the decisions which the Chinese authorities had to make for the realization of the plans. Namely, they had to get the permission for the domestic investors from the Chinese Central Bank to invest in Russian government securities as well as the resolution of the People’s Bank of China to open at NSD a custody account of the foreign nominal holder.

In April the South China Morning Post, citing the sources, released the information that the Industrial and Commercial Bank of China, Bank of China and Gazprombank could implement the placement of Russian bonds in CNY. But the Finance Ministry denied this information by making a statement that they didn’t carry out the selection of the bond placement organizers.

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