Inflating economic statistics is an old commie trick going back 100 years to the days of Lenin. Low-level bureaucrats at the local level inflate production numbers to make their regional bosses happy. The regional bosses inflate the numbers to make national party leaders happy. By the time the numbers are publicized, they are laughably overblown.
According to Brookings, much of the manipulation in Chinese official government statistics takes place at the local level. In what the FT described as "a legacy of Maoist state planning", authorities in Beijing hand down growth targets to local officials, who use it to goalseek the official statistics they hand back.
"China's national accounts are based on data collected by local governments. However, since local governments are rewarded for meeting growth and investment targets, they have an incentive to skew local statistics. China's National Bureau of Statistics (NBS) adjusts the data provided by local governments to calculate GDP at the national level," the study's authors said.
Evidence of this is relatively obvious: Year after year, the sum total of China's provincial growth figures is larger than the unadjusted national figures reported by Beijing. Though central authorities accused three provinces of doctoring their data back in 2017, authorities have done little else to discourage the practice.
There are a lot of people who think Brookings is lowballing the number-fudging. Some estimates put the actual GDP number at 50% of the "official" number.
South China Morning Post:
In a speech in Shanghai this week, Michael Pettis, professor of finance at Peking University, warned that China's debt is closely linked to the government's perceived overstatement of its gross domestic product (GDP).
A carefully researched study by economists at the Brookings Institute estimates that the Chinese government inflates its gross domestic product by about 12%.
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The reason this is important is that even with the Chinese overestimating their national wealth, they still have a huge economy. And the current downturn in economic growth in China threatens to hurl the world into a serious recession.
Zero Hedge:
Since China managed to weather the fallout from the financial crisis without registering much of a slowdown in its "official" GDP figures, playing "guess the real growth rate" has become one of the most popular parlor games among the professional economist set. Whereas the stakes are much higher for academics on the mainland (one of whom was censored and threatened by government thugs after speculating that GDP growth on the mainland might be closer to 2%), researchers at American think tanks have freely offered estimates ranging from 2% to 4% (which, admittedly, would still put China well ahead of the US).
But as investors and economists once again cast a wary eye toward China as signs of flagging growth are once again threatening to sink the whole world into a recession, a team of researchers from the Brookings Institute has published a carefully researched paper detailing the exact mechanism by which authorities in Beijing inflate the country's GDP figures, while estimating that China's economy is roughly 12% smaller than the official figures would suggest. Brookings published the paper on Thursday, just two days after Party leaders at the annual National Party Congress lowered their economic growth forecast to between 6% and 6.5% of GDP.
(Excerpt) Read more at americanthinker.com ..
According to Brookings, much of the manipulation in Chinese official government statistics takes place at the local level. In what the FT described as "a legacy of Maoist state planning", authorities in Beijing hand down growth targets to local officials, who use it to goalseek the official statistics they hand back.
"China's national accounts are based on data collected by local governments. However, since local governments are rewarded for meeting growth and investment targets, they have an incentive to skew local statistics. China's National Bureau of Statistics (NBS) adjusts the data provided by local governments to calculate GDP at the national level," the study's authors said.
Evidence of this is relatively obvious: Year after year, the sum total of China's provincial growth figures is larger than the unadjusted national figures reported by Beijing. Though central authorities accused three provinces of doctoring their data back in 2017, authorities have done little else to discourage the practice.
There are a lot of people who think Brookings is lowballing the number-fudging. Some estimates put the actual GDP number at 50% of the "official" number.
South China Morning Post:
In a speech in Shanghai this week, Michael Pettis, professor of finance at Peking University, warned that China's debt is closely linked to the government's perceived overstatement of its gross domestic product (GDP).
A carefully researched study by economists at the Brookings Institute estimates that the Chinese government inflates its gross domestic product by about 12%.
-----------------------'
The reason this is important is that even with the Chinese overestimating their national wealth, they still have a huge economy. And the current downturn in economic growth in China threatens to hurl the world into a serious recession.
Zero Hedge:
Since China managed to weather the fallout from the financial crisis without registering much of a slowdown in its "official" GDP figures, playing "guess the real growth rate" has become one of the most popular parlor games among the professional economist set. Whereas the stakes are much higher for academics on the mainland (one of whom was censored and threatened by government thugs after speculating that GDP growth on the mainland might be closer to 2%), researchers at American think tanks have freely offered estimates ranging from 2% to 4% (which, admittedly, would still put China well ahead of the US).
But as investors and economists once again cast a wary eye toward China as signs of flagging growth are once again threatening to sink the whole world into a recession, a team of researchers from the Brookings Institute has published a carefully researched paper detailing the exact mechanism by which authorities in Beijing inflate the country's GDP figures, while estimating that China's economy is roughly 12% smaller than the official figures would suggest. Brookings published the paper on Thursday, just two days after Party leaders at the annual National Party Congress lowered their economic growth forecast to between 6% and 6.5% of GDP.
(Excerpt) Read more at americanthinker.com ..
