Is China fudging its figures? Evidence from trading partner data

John Fernald (), Eric Hsu and Mark Spiegel

No 2015-12, Working Paper Series from Federal Reserve Bank of San Francisco

Abstract: How reliable are China?s GDP and other data? We address this question by using trading-partner exports to China as an independent measure of its economic activity from 2000-2014. We find that the information content of Chinese GDP improves markedly after 2008. We also consider a number of plausible, non-GDP indicators of economic activity that have been identified as alternative Chinese output measures. We find that activity factors based on the first principal component of sets of indicators are substantially more informative than GDP alone. The index that best matches activity in-sample uses four indicators: electricity, rail freight, an index of raw materials supply, and retail sales. Adding GDP to this group only modestly improves in-sample performance. Moreover, out of sample, a single activity factor without GDP proves the most reliable measure of economic activity.

JEL-codes: C53 C82 E20 F17 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2015-09-21
New Economics Papers: this item is included in nep-cna and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

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DOI: 10.24148/wp2015-12

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