It seemed to sum up China's triumphant economic emergence perfectly. On December 20, Beijing announced that according to a new and more detailed assessment of the economy, China's gross domestic product for last year was actually 2.3 trillion yuan, or 17 per cent greater than was previously thought.

To put it another way, the revision is equivalent to Beijing's statisticians suddenly stumbling across a hitherto undiscovered province somewhere in China's interior with an economy about the size of Taiwan's.

At the revised level, China overhauled Italy to rank as the world's sixth-largest economy last year. With growth in excess of 9 per cent forecast for this year, pundits predict confidently that by now, the mainland will have already overtaken France and Britain to take fourth place in the global economic league.

This represents an impressive performance by anyone's standards. But more importantly, the revision makes China's development look a lot more balanced. It is as if the economy of the newly discovered province consisted almost entirely of service industries, rather than the construction and manufacturing for export that until now have been thought so critical to China's growth.

Factoring in the new figures, services now account for 41 per cent of economic output, rather than the anomalously low 32 per cent previously indicated. At the same time, the share of construction and industry drops to 46 per cent from 53 per cent.

The reassessment goes some way towards soothing fears that China is busy inflating a bubble economy. A bigger service sector means more domestic spending, and a smaller share in the economy for capital-intensive manufacturing industries means overall output is less reliant on investment.

According to economists, under the new figures, investment accounts for about 38 per cent to 40 per cent of GDP compared with an unsustainably high 44 per cent to 46 per cent previously.

Even so, although more accurate counting paints a more encouraging picture of China's economic mix, it does not solve the existing problems caused by rapid growth.

Investment may appear smaller as a share of GDP but capital spending is still high and growing fast and big doubts persist about Chinese companies' ability to generate a decent return on their investments.

For some companies, time is already running out. Although China's currency has appreciated by only about 2.5 per cent against the US dollar since its July revaluation, the strength of the dollar on global markets meant that over the first 11 months of this year, the yuan appreciated by more than 10 per cent on a trade-weighted basis. For many of China's listed exporters, which were already operating on single-figure profit margins, that appreciation will be enough to plunge them into the red, exacerbating banks' bad loan problems.

That means more problems in the future. If China is truly to escape the sort of economic bubble and subsequent collapse that marked the rise of Japan and South Korea, company managers must focus on generating better returns on investment. As long as executives would rather build unprofitable empires through lavish investment in plant and equipment, China's economic development - although impressive - will remain fragile.