China’s ‘dodgy data’ belie true rate of growth
cables years ago from when he was Communist Party head in Liaoning province calling GDP figures “manmade” and unreliable. This remains a buttress for widespread scepticism.
Fathom publishes a simple indicator based on three variables which, according to the cables, Mr Li said he was watching for a better view of the economy: electricity consumption, railcargo volume, and bank lending.
That implies a growth rate of 3.2%, and shows a decoupling from the official rate since late 2013 based on a plunge in rail-freight volumes and below-trend growth in electricity production.
“Clearly nobody believes the data,” said Sushil Wadhwani, a former Bank of England monetary policy committee member and founder of Wadhwani Asset Management.
Mr Wadhwani said he also looked at various proxies of China’s growth rate, which he deems are “pretty unreliable” as well, and which suggest anywhere from 1.5% to about 5% growth.
“I truly don’t know where we are in that range,” he said.
China’s National Bureau of Statistics did not respond to requests for comment on the accuracy and speed of its GDP data. At its quarterly press briefing last month, the bureau defended the veracity of the data, saying critics did not fully understand accounting methods that China uses, and that authorities were continuously refining the accuracy of the figures.
The speed at which China publishes its GDP data, sometimes within two weeks of a quarter-end, remains a mystery. The equivalent data for Hong Kong can take six weeks to come out.
“For a long time, investors and multinationals have not held the Chinese government accountable for having better data,” said Leland Miller, president of China Beige Book International, a New York-based firm providing anecdotal survey information about China. “These people have said, ‘It’s good enough.’ So the Chinese have been able to get away with it.”