China's government sharply increased the official size of its economy in a report Tuesday that said output grew by 16.8 percent last year — nearly twice the figure reported earlier.

The figures were issued by the National Bureau of Statistics following a survey meant to gather more accurate data on China's emerging service industries such as restaurants and retailers, which were underreported in earlier statistics.

The data could have far-reaching effects on social and economic policymaking as the government tries to create new jobs for unemployed workers, formulates investment strategy and copes with complaints by its trading partners about the state-controlled value of its currency.

The government will be revising economic growth figures back to 1993 based on the new research, the director of the statistics bureau, Li Deshui, said at a news conference.

"These new figures give us a clearer picture and a better way of understanding China's economy," Li said. "Based on these figures, we can have even more confidence in our long-term fairly fast and sustained economic growth."

Based on the new data, China's mainland replaced Italy as the world's 6th-largest economy in 2004, but still ranked behind Britain and France, Li said. He said Beijing would have to wait for this year's figures to be compiled before it would know its current rank.

China's overall economic rank would jump to No. 4, behind only the United States, Japan and Germany, if the Chinese territory of Hong Kong were included in the data. Hong Kong is treated as a separate economy by mainland officials and has its own currency and trade statistics.

Economists have long said China's already stunning official figures showing annual growth above 9 percent in recent years understate the size of its economy due to antiquated data gathering that focused on manufacturing and undercounted emerging service industries.

Based on the new research, the government raised its estimate of China's economic output in 2004 to nearly 15.987 trillion yuan (nearly $1.981 trillion), Li said.

That was an increase of 2.3 trillion yuan ($285 billion) over the figure previously reported, he said.

Service industries' share of economic output jumped from 31.9 percent to 40.7 percent, Li said. He said the survey found smaller increases in output from manufacturing, farming and other economic sectors.

Despite the sharp upward revision of its gross domestic product, China still ranks below the top 100 countries in economic output per person, Li said.

"We still have a long way to go to catch up with the developed countries," he said.

Li defended his agency's earlier data, saying they "do not distort the size of the national economy" and didn't mislead policymakers.

"It would still reflect the general level and the trend in economic development," he said. "We still can have a good picture of the basic conditions in China and its development. There is no fundamental change of the overall picture."