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Some good recent research on Chinese data reliability: the basic conclusion is that the government has consistently falsified official GDP since 2012.
But it's also a bit more complicated than that. Here's the story, and a short thread: https://www.economist.com/finance-and-economics/2020/10/15/can-chinas-reported-growth-be-trusted (1/x)
But it's also a bit more complicated than that. Here's the story, and a short thread: https://www.economist.com/finance-and-economics/2020/10/15/can-chinas-reported-growth-be-trusted (1/x)
Specifically, real GDP growth has been abnormally smooth. But there's disagreement about the direction of misreporting. @CapEconChina sees consistent over-reporting. Net effect: whereas official GDP grew by 48% in total from 2014 to 2019, they put the true expansion at 33%. (2/x)
Economists with the Federal Reserve Bank of San Francisco see more two-sided manipulation, such that growth has actually been a little faster than officially reported about half the time. Either way, official growth data has become less reliable since 2013. (3/x)
But before dismissing all China data as therefore manipulated, it's important to note two things. First, nominal data actually looks much more volatile and more credible. It's in the translation to real growth (choice of the deflator) that the NBS seems to be fiddling. (4/x)
Second, the Fed economists compared China's non-GDP data to others' exports to China (ie, data independent from China). Their view: apart from real GDP, many Chinese indicators have actually become more reliable -- hence allowing for GDP proxies. (5/x) https://www.sciencedirect.com/science/article/pii/S0261560620302187?via%3Dihub
And while the proxies differ in their analysis of the depth of China's contraction earlier this year during its covid lockdown, they are in agreement that the rebound since then has been big. (6/6) https://www.economist.com/finance-and-economics/2020/10/15/can-chinas-reported-growth-be-trusted
