Last year’s GDP growth rate? Pick a number
Longstanding suspicions about the accuracy of China’s official GDP growth data have spurred a market for alternative calculations, which kicked into action this week after Beijing announced economic expansion for 2023 was in line with its annual target of about 5 per cent.
There’s a consensus that the economy grew last year, propelled by a rebound in consumption after pandemic restrictions were lifted. That’s readily visible in data compiled outside China’s National Bureau of Statistics — such as the number of domestic flights, or the revenue growth of consumerfocused companies.
What’s also agreed between official and independent estimates is that a sharp drop in real estate construction, alongside strained local government finances and falling exports, posed downward pressure on the world’s secondlargest economy.
One divergence centres on Beijing’s investment data, which shows surging manufacturing and infrastructure spending outweighed the drag from property.
Others disagree. Overall investment was broadly flat last year, meaning GDP data “significantly overstated” China’s growth in 2023, according to Logan Wright, a director at Rhodium Group. He said the real figure was likely around 1.5 per cent.
Doubts about China’s official investment statistics — which measure spending on things like housing, factories and infrastructure — have been fuelled by frequent revisions in recent years, and the latest data implies an unusually large adjustment.
Fixed asset investment, or FAI, increased 3 per cent in nominal terms in 2023, the Statistics Bureau said. But it added that the total amount of investment, at 50.3 trillion yuan ($11.5 trillion), couldn’t be directly compared with the amount it reported for 2022 due to factors including “problematic data discovered during statistical law enforcement inspections”.
The FAI growth number for 2023 implies a downward revision of 7 trillion yuan, or 17 per cent of total investment from the amount initially announced for the previous year, according to economists at
Pantheon Macroeconomics. They called the adjustment “staggering”.
The revision “shows just how problematic these data are,” said Carsten Holz, an economics professor specialising in Chinese statistics at the Hong Kong University of Science and Technology.
The central statistics bureau lacks authority to enforce accurate reporting on lower-level officials and finds itself in an “increasingly politicised administrative environment,” Holz said.
Rhodium’s growth estimate for 2023 is at the low end of a broad scale. A sampling of independent estimates gathered by Bloomberg showed others with expansion figures ranging as high as 7.2 per cent.