China's Economy - Unreliable Statistics
China’s official statistics are not reliable, as there are serious deficiencies in the way the Chinese government gathers, measures, and presents its data. In the Great Leap Forward (1959-62), China suffered extreme declines in agricultural output. Local officials nevertheless overstated production, contributing to the worst famine epidemic in the nation’s history.
Some analysts believe that growth has not been as great as officially reported because of suspect data. Official Chinese economic statistics, although improving, are generally considered unreliable. The World Bank estimates that China overstated its growth between 1978 and 1995 by 1.2 percent a year; the OECD believes the overstatement was 3.8 percent between 1986 through 1995 (Lardy 2002). Unlike most developed countries, China does not seasonally adjust its statistics, and the lack of seasonal adjustment can distort recent activity. Other analysts question the accuracy of the raw data themselves. Business Report (2004) suggests that economic figures should be viewed as "highly manipulated political statements" rather than hard numbers. Even trade statistics are not considered reliable. The New York Times (2004) reports that some companies exaggerate exports to claim tax credits, and others underreport imports to avoid customs duties. Despite all these qualifications, however, there is general agreement that China's economy has grown tremendously over the past two decades, although less than officially reported.Mainland China’s Ministry of Commerce published a report on the nation’s foreign trade on 27 December 2014, showing that volumes of trans-border goods circulation added only 3.5% in 2014, as compared to the government’s target of 7.5%. However, soon after the initial publication, the report was replaced by an edited version with the numbers erased, according to a Reuters report.
In 2007, China’s future premier Li Keqiang indicated electricity consumption, rail cargo volumes, and bank lending as his preferred measures of economic activity, in place of official GDP. Noted economist Lester Thurow wrote in 2007 that "China claims that its economy is growing at 10 to 11 percent a year, and China’s official analysts say that their nation will catch up with the United States long before the 22nd century arrives. Don’t believe it. ... Economic growth rates can be inferred from electricity consumption... if we consider China’s actual electrical use, which is relatively easy to measure, and do a little math, we come up with this estimate: The G.D.P. in China has been growing somewhere between 4.5 percent (using the average for a rapidly growing country) to 6 percent a year (using the highest rate for Japan), not at the 10 percent rate claimed in official statistics.... If, in 2100, China has four times as many people as the United States, as it does now, China would still not have a total G.D.P. equal to America’s.... But it is unlikely to have four times as many people.... China should experience a decline in population in the 21st century.... If immigration to the United States continued at the current rate, America’s population ... would more than double by 2100..."
The official real GDP growth for 2012 was unreliable. Several indicators - electricity production, crude oil production, rail turnover, automotive sales, and gross industrial output – witnessed sharp drops beginning in 2010 that were not reflected in official real GDP growth statistics, which remained remarkably stable.
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