China GDP fuels fresh doubts about reliability of official data

April 27, 2015 10:20
Economists believe China's statistics agency may be overstating the nation's GDP growth figure to arrive at the government's official target. Photo: Bloomberg

China's first-quarter GDP data has fueled fresh skepticism about the reliability of the nation's official statistics, with some experts saying that the actual growth could be much worse than the officially reported figure of 7 percent.

Citibank, in a recent report, said it believes that actual quarterly growth could be below 6 percent year to year, depending on the factors weighed, the Wall Street Journal reported.

Other research firms put their numbers far lower, with Capital Economics pegging the growth at 4.9 percent and the Conference Board’s China Center at 4 percent, the report noted.

Economists have good reason to mistrust the official data as the figures are suspiciously smooth, with none of the sharp gyrations seen in the US or other economies.

The methodology often appears inconsistent or contradictory, and also no one knows how China accounts for inflation when tabulating its growth figure, the report said.

Meanwhile, economists point to the discrepancy between headline GDP growth and industrial production.

Data on electricity consumption and investment, among other things, also do not match with the headline economic growth figure.

How China's statistics agency arrives at its GDP figures is "anybody’s guess", Carsten Holz, an economics professor at the Hong Kong University of Science and Technology, told the Journal.

Citing an "atrocious lack of transparency", the professor said he "wouldn’t take the 7 percent figure too seriously".

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