CHINA - China's three decades of double-digit economic growth have come to an end.
The country's leaders have signalled a policy departure, giving up its single-minded pursuit of economic growth in quantitative terms.
There will be no more pure gross domestic product (GDP) growth at all costs in future.
This new development has recently become official. China's National Bureau of Statistics (NBS) announced early this month that steps were being taken to end what it called "GDP supremacy".
The conventional GDP accounting regime will be suitably adjusted by giving more weight to activities such as innovation and research and development, much as the United States has recently done.
But China will do more adjustments in a number of areas, such as environmental improvement and people's livelihood.
The task is clearly full of challenges. Any attempt to adjust GDP accounts to reflect more of the quality aspects of economic production is an exceedingly difficult exercise.
For GDP accounting, most mainstream economists have long been aware of the inherent technical limits of factoring in intractable variables, such as "negative externalities" like pollution.
Recently, challenges to the GDP concept have arisen from those who argue that it ignores well-being, human happiness or satisfaction, and is, thus, not a good measure of people's welfare.
Changing GDP calculations to factor in externalities such as pollution would entail the enormous statistical complications of how to price pollution and its wide-ranging social impact.
Taking on board the second set of objections relating to welfare would involve the philosophical issue of how to measure human satisfaction or anything that involves inter-personal comparison of human happiness.
Welfare economists have long been debating, inconclusively, how to measure human happiness - called "utility" - without making a value judgment.
Neither the "cardinal concept" of quantifying utility nor the "ordinal concept" of ranking it has been universally accepted.
In any case, if the NBS were indeed trying to temper too much such "qualitative adjustment", this would render China's GDP accounts internationally incomparable.
Broader set of measurements
The most significant outcome of the NBS exercise is its plan to provide a more comprehensive and multi-faceted periodic assessment of China's economic performance beyond GDP.
In future, apart from GDP data to show economic growth, the NBS will also provide some 40 core indicators that can better capture economic and social changes in crucial areas such as industrial upgrading, technological development, environmental protection, rural-urban income gaps, urbanisation, people's livelihood and so on.
In this way, Chinese policymakers can develop a more balanced picture of China's "real" economic and social progress, not being unduly misled by the heady rise of GDP numbers alone.
Thus, the long-term significance of NBS' new move is not so much about the technical exercise of adjusting China's GDP accounting as it is about the underlying implication of a fundamental policy shift towards a kind of better-quality economic growth in future.
Indeed, China's Finance Minister Lou Jiwei, at the 2014 Group of 20 finance ministers' meeting in Cairns, Australia, confirmed such a change. China's macroeconomic policy would, from now on, focus more on comprehensive targets like stable employment and low inflation.
The government would no longer respond to short-term changes in certain GDP indicators, but would instead stick to its long-term goals of structural reforms and industrial upgrading.
Mr Lou also reaffirmed China's "new normal" of lower but more stable growth.
As economic growth fluctuates, the government would refrain from its past practice of taking unnecessary stimulus measures to artificially boost short-term growth rates.