SHANGHAI, Dec. 20 - Many economists have long suspected that official government statistics here provided only a shadow of reality.
With China's announcement on Tuesday that its economy was considerably bigger than previously estimated, economists and financial prognosticators are scrambling to rethink their assessment of China's rise and its role on the world stage. China's new figures suggest that it probably has passed France, Italy and Britain to become the world's fourth-largest economy.
Some economists are even accelerating their timetables for when China may eclipse the United States as the world's biggest economy. With the new figures offering a more expansive view of economic activity, some said China could overtake the United States as early as 2035, at least five years earlier than previous projections.
"We now have a new snapshot of the Chinese economy," said Hong Liang, an economist at Goldman Sachs. "This is not slightly bigger - it's a significantly bigger economy."
China said it revised its economic data after a yearlong nationwide economic census uncovered about $280 billion in hidden economic output last year. The new output was the equivalent of an economy the size of Turkey's or Indonesia's - or 40 percent the size of India's economy.
As a result, China's gross domestic product for last year is now estimated at nearly $2 trillion, not the previously reported $1.65 trillion. That translates into an adjusted increase of 17 percent, making China the sixth-largest economy in the world in 2004.
With China expected to report another year of sizzling economic growth in 2005, its economy may already be ranked No. 4, trailing only the United States, Japan and Germany. Moreover, even after two decades of very strong growth, China is still the world's fastest-growing major economy, expanding more than 9 percent over the last few years.
The United States economy is still far in front, with a value of about $11.7 trillion last year. And for all China's fast growth and its rapid ascension to the major leagues among national economies, it remains a relatively poor country.
Even with the expected revision, China's output per person will climb to a little more than $1,700 this year. It ranked 134th in income per person in 2003, according to the World Bank.
Though its statisticians are highly trained, China is still quite secretive about its methods and means for gathering economic data. This has long generated debate among economists, much as the Soviet Union's economic figures did: some economists think China's figures disguise weakness, while others think they hide strength.
The figures for China's national accounts - the numbers that measure gross domestic product, including spending and trade - are supplied by its National Bureau of Statistics.
The bureau publishes several sets of statistics - some as often as monthly - based either on its own estimates or upon numbers supplied by China's local governments. But those figures can vary widely. Totting up regional gross domestic product in 2003, for example, gives a figure of $1.6 trillion, 12 percent to 15 percent higher than the bureau's own estimates.
The discrepancy also underscores a difference in incentives. Provincial and municipal authorities want to impress Beijing and limit any embarrassments, as the delays in reporting bird flu cases and the chemical spill in Jilin Province have shown.
Beijing worries more about its reputation in the rest of the world, where accuracy is paramount.
There are other reasons that huge swathes of the Chinese economy are unreported, said Frank Gong, the chief China economist for J. P. Morgan Chase.
"The way they collect the G.D.P. is really from supply-side, production-based statistics," he said.
Mr. Gong suggested that collecting data from the demand side - what consumers actually spend - would be more telling.
In a system left over from when China was almost entirely a planned economy, however, all the factories and supermarkets report their own sales and spending.
"That's problematic," he said. "The service part - the cash component of the economy - can be omitted easily. That's why the statistics tend to understate the actual level of activity."
Economists say the new figures provide good news for China, suggesting that the economy is healthier, more diversified and more sustainable than previously believed.
The revised figures, for instance, show that a much stronger services sector has emerged in the Chinese economy, taking some weight off manufacturing. Dong Tao, an economist at Credit Suisse First Boston, said Tuesday in a statement that China might still be underestimating the size of its services sector by about $200 billion.
The new figures also relieve some worries that the economy was too heavily dependent on investment and could overheat. And they show that there are more small and medium-size companies in the country. Stephen Green, a senior economist at Standard Chartered Bank, said the new figures calm some fears about imbalances in the economy.
"It's all good," Mr. Green said. "A bigger economy means all the dangerous ratios, such as investment as a percentage of G.D.P., all fall. And they are usually cited as showing the Chinese economy is in danger or headed for a fall."
The new figures are also expected to affect government planners and policy makers, altering things like monetary policy and inflation forecasts, or how government officials allocate money in the economy.
On a more technical note, Jiemin Guo, a senior economist at the United States Bureau of Economic Analysis, pointed out a fundamental problem with China's numbers.
Most wealthy nations use a changing base for their gross domestic product series, to allow for differences over time in the basket of goods and services that consumers demand: experts don't want to use the price of a 1985 home computer, for example, in calculating today's gross domestic product.
But China uses a fixed base for several years at a time, Mr. Guo said, which results in a growing bias. Like the underreporting of the service sector, this issue is especially serious, because it could affect the accuracy not just of the gross domestic product but also of its growth rate over time.
The statistics bureau has acknowledged several of these problems and, unlike the old Soviet scorekeepers, it is eager to improve the quality of its statistics.
The bureau is working with the World Bank to develop a plan for its statistical apparatus, which would include reconciling the national and local figures.
Ms. Hong at Goldman Sachs offered an analogy to explain why the new figures were important.
"Does China have some structural illness or cancer, or is there an error with the X-ray?" she asked rhetorically.
"The last few years, so many famous economists cited the very high investment-to-G.D.P. ratio as a serious problem. Now it looks like the X-ray machine had a problem, not the patient."