Is China fudging its economic figures? Does it matter?

Xiang Songzuo, Deputy Director and Senior Fellow of the Center for International Monetary Research at China’s Renmin University delivered an address in China in December where he openly questioned the official economic figures from Beijing:

Xiang challenged the figure given by the National Bureau of Statistics, which claims that China’s rate of GDP growth is at 6.5 percent. According to some researches, Xiang said, the real growth rate could be just 1.67 percent, while more dismal estimates say that China’s economy is actually shrinking. . . the Chinese regime leadership had made major miscalculations, especially in terms of the Chinese Communist Party’s (CCP) stance in the Sino-U.S. trade war. . . Beyond the CCP’s stubborn attitude towards U.S. demands, a second cause for the recent downturn in the Chinese economy was the severe hit to private enterprises this year, Xiang said. Private investment and investments into private enterprises have slowed sharply, severely impacting confidence among entrepreneurs.

It looks like the Chinese government may be putting out overly optimistic estimates of economic growth in China.

Does that make any difference to people in the US and others outside China?

Back in 2015, China admitted that the official figures on coal usage were low by about 14%. China uses roughly as much coal as the rest of the world combined, so the difference in the estimate was only a little lower that the total US coal consumption.

How can climate agreements work if there is such a large uncertainty in the numbers from China?

Ask Donald Trump, he’s the ultimate authority on which numbers we should believe.

It’s actually important to know with some accuracy what’s going on in China’s economy.

No laughing matter.

It may be vitally important to know this information, but why would any sane person believe any information coming from a closed country. Particularly one that has a sharp and deadly history of controlling any news about themselves?
You will learn just what they want you to learn.

Knowing information is clearly not important when it comes to international trade and policy.

Yes, it is important to understand what is going on in China. Patterns that raise concerns include:

  1. If growth in China has slowed to low level or perhaps even gone negative, then people in China are feeling the pinch. Ignoring the facts is setting the stage for bigger problems in the future.

  2. If the cause of the poor growth is combination of Chinese trade policy and stifling private businesses in favor of government operations, then they problems are likely to get worse.

  3. Recent change to allow Xi Jinping to remain in office as President for life with no term limits. Poor policies may remain in place for a very long time.
    China's Xi allowed to remain 'president for life' as term limits removed - BBC News

  4. Unreliable statistics on Chinese coal consumption makes verification of compliance with any climate agreements virtually impossible.