Red Economy In The Red? US Think Tank Feels China Fudged GDP Data Between 2008 And 2016, For Better Optics

According to a new study, China ‘exaggerated’ its Gross Domestic Product (GDP) estimate between 2008 and 2016 by full two percentage points on an average, with miscalculations increasing every year, reports South China Morning Post (SCMP).

The study titled “A Forensic Examination of China’s National Account”, was submitted to the “Brookings Papers on Economic Activity”, a journal published by the US-based think tank Brookings Institute on macroeconomic issues.

It states that the actual size of China’s economy at the end of 2018 was markedly below the government’s official estimate.

“Our estimates suggest that the extent by which local governments exaggerate local GDP accelerated after 2008, but the magnitude of the adjustment by the National Bureau of Statistics did not change in tandem,” the study’s authors noted.

By Accident Or By Design

Using China’s nominal GDP and growth rate figures, the current nominal size of the Chinese economy is estimated to be 18 per cent lower than the official US$13.4 trillion (90 trillion yuan) at the end of 2018.

This study raises suspicions not only about the quality of economic data coming from the world’s second-largest economy, but whether the authoritarian government led by President Xi Jinping deliberately fudged the data to present a rosy picture of the economy.