Is China Fudging Its GDP Figures? Evidence from Trading Partner Data

John Fernald (), Eric Hsu and Mark Spiegel

No 2019-19, Working Paper Series from Federal Reserve Bank of San Francisco

Abstract: We propose using imports, measured as reported exports of trading partners, as an alternative benchmark to gauge the accuracy of alternative Chinese indicators (including GDP) of fluctuations in economic activity. Externally-reported imports are likely to be relatively well measured, as well as free from domestic manipulation. Using principal components, we derive activity indices from a wide range of indicators and examine their fit to (trading-partner reported) imports. We choose a preferred index of eight non-GDP indicators (which we call the China Cyclical Activity Tracker, or C-CAT). Comparison with that index and others indicate that Chinese statistics have broadly become more reliable in measuring cyclical fluctuations over time. However, GDP adds little information relative to combinations of other indicators. Moreover, since 2013, Chinese GDP growth has shown little volatility around a gradually slowing trend. Other measures, including the C-CAT and imports, do not show this reduction in volatility. Since 2017, the C-CAT slowed from well above trend to close to trend. As of mid- 2019, it was giving the same cyclical signal as GDP.

JEL-codes: C53 C82 E20 F17 (search for similar items in EconPapers)
Pages: 49 pages
Date: 2019-09-04
New Economics Papers: this item is included in nep-cna, nep-mac and nep-tra
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Citations: View citations in EconPapers (2)

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Journal Article: Is China fudging its GDP figures? Evidence from trading partner data (2021)
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DOI: 10.24148/wp2019-19

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