Claims have been raised that China's gross domestic product (GDP) indicator has not escaped its chronic manipulation problem. Experts say China's statistical accuracy deteriorated starting with COVID-19, and that the government has consistently tolerated shoddy statistics.
According to the Financial Times (FT) on the 18th local time, the Chinese government is undermining overall confidence in its statistics by withholding detailed indicators. China's quarterly real GDP growth rate came in at 4.6% last year, rose to 5.4% the following quarter, and has exceeded 5% this year. The full-year real GDP growth rate for this year is estimated to top 5%.
In particular, the opaque aggregation method is the decisive reason for the lack of credibility. According to the FT, China still defines GDP in a Soviet-style manner, which adds the value of raw materials fed into state-owned factories to the value of goods produced by those factories. It is a backward method compared with: ▲ the production methodology that sums all production values generated in a country during a given period by institutional sector ▲ the consumption methodology that totals the goods and services consumed by the people ▲ the income methodology that adds up all kinds of income generated within a country, such as wages, interest, and investment income.
Carsten Holz, a professor at the Hong Kong University of Science and Technology, said, "In the past, China's National Bureau of Statistics (NBS) used to make phone rounds because of numerical errors," and noted, "It seems these problems still have not been resolved."
The Chinese Communist Party's authoritarian organizational culture is also contributing to the erosion of credibility. Earlier, in a March announcement this year, the Chinese government declared it would achieve around 5% annual GDP growth for three consecutive years, but local government officials are said to be reporting inflated figures to higher authorities.
There are also claims that since the mid-2000s, the NBS adjusted reports from localities to announce GDP growth of around 5% a year. Gao Shanwen, chief economist at China Guotai Junan Securities, said, "Over the past two to three years, the official (growth) figures are close to an annual average of 5%," but added, "I suspect the actual figure is around 2%."