Chinese Economy/Development thread (updated regularly)

[Brotherhood]

The Truth About China's GDP

By Caitlin Dickson | December 07, 2010 12:08pm

China's famously booming GDP statistics are, according to yet another WikiLeaks cable released last week, not exactly real. Li Keqiang, a senior Chinese official and rumored front runner for the prime minister's chair, is quoted in the cable as having referred to the country's GDP numbers as "man-made" and "therefore unreliable." The Telegraph reports that "Chinese officials have repeatedly been found to have artificially inflated their local GDP figures in order to win face and hit their targets," and that, "on several occasions, the sum of all China's local GDP tallies added up to more than the national statistic."

This revelation might seem shocking, but those who have followed China's economy closely are not surprised to find out the books have been cooked.

* Called It! "Anyone watching China should know the numbers are very edgy," Robert Wenzel writes, referring to his own a recent blogpost on Economic Policy Journal in which he wrote, that "China's real estate market appears to be on the edge of breaking down. It is very difficult to get reliable numbers out of China, so it is often best just to look at the anecdotal evidence."

* Not Exactly News Economic reports on China have hinted at something fishy for past couple of years. Yves Smith at Naked Capitalism agrees that, "this WikiLeaks release, like so many others, is not news to anyone who has been on this beat," and links to some of the articles that have kept her in the know.

* It All Makes Sense Now James Pethokoukis at Reuters makes the connection between China's fictional statistics and previous reports of ghost towns and giant empty malls that create the impression of a thriving population and commercial culture.

* Look Out, Assange Tracy Alloway at Financial Times Alphaville warns that "WikiLeaks, fresh from angering US authorities, might be about to incur the wrath of China's economic establishment."

Solomon2, will you stop trolling and shove all your so-called personal opinions from some na-sayers up yours....for good please, your jealousy juice is leaking from your behind, it st...,thanks in advance.

 

[Solomon2]

I want to hear your views on this news, right?

I'm surprised. I had long suspected that China's official economic growth was understated so China could escape the international obligations commensurate with a strong economy: IMF duties, World Bank and U.N. contributions, etc.

If you read the report carefully, however, the commentators only witnessed the civilian economy. I have suspected China buffered the shocks of 2008 by increasing military production somewhat. For example, I think that truck production, including trucks delivered to the Chinese military, took up some of the slack at Chinese factories in the 2008-9 period.

 

[huzihaidao12]

I'm surprised. I had long suspected that China's official economic growth was understated so China could escape the international obligations commensurate with a strong economy: IMF duties, World Bank and U.N. contributions, etc.

If you read the report carefully, however, the commentators only witnessed the civilian economy. I have suspected China buffered the shocks of 2008 by increasing military production somewhat. For example, I think that truck production, including trucks delivered to the Chinese military, took up some of the slack at Chinese factories in the 2008-9 period.

But your view is the opposite and the news, why do you go to quote? Incidentally, the exact size of China's economy, no one can know well, including the CCP.

 

[Solomon2]

But your view is the opposite and the news, why do you go to quote?

Why would I call attention only to those news items that support my views? My views might be wrong and in need of revision. So I wanted the opinions of the Chinese here about this report.

the exact size of China's economy, no one can know well, including the CCP

Since the early twentieth century the U.S., in cooperation with business, developed good tools for monitoring industrial, service, and financial activity. I assumed that a heavily state-owned economy with a history of central planning would have similar or better tools.

 

[huzihaidao12]

Also, China is a great contribution to the United Nations, we have the second largest peacekeeping force personnel, the first is France. However, it is certainly a greater contribution than the US who has been in arrears.

As for the IMF duties, World Bank, if those institutions to give China more rights, I do not mind China to assume a greater obligation. They can give?

 

[Solomon2]

As for the IMF duties, World Bank, if those institutions to give China more rights, I do not mind China to assume a greater obligation. They can give?

With increased contributions comes increased voting rights. Here's a story on it: China influence grows with World Bank vote change. Basically in April 2010 China gained influence at the expense of Japan. Doing so cost China $50 billion.

 

[huzihaidao12]

Why would I call attention only to those news items that support my views? My views might be wrong and in need of revision. So I wanted the opinions of the Chinese here about this report.

Of course, you can do, but generally speaking, if you quote an article that is not to explain own point? However, this is not important, but some ambiguity.

Since the early twentieth century the U.S., in cooperation with business, developed good tools for monitoring industrial, service, and financial activity. I assumed that a heavily state-owned economy with a history of central planning would have similar or better tools.

Data must have, can only say that China's official economic data is generally "accurate", my point also same, the data underestimate, but I think some parts of the tertiary industry not statistically sufficient, because of China's traditional focus on primary and secondary industries.

 

[huzihaidao12]

With increased contributions comes increased voting rights. Here's a story on it: China influence grows with World Bank vote change. Basically in April 2010 China gained influence at the expense of Japan. Doing so cost China $50 billion.

If you give more shares, I think China will be more money.

 

[huzihaidao12]

China's tertiary industry has developed rapidly, but because of management, statistics may be some omissions.

 

[Solomon2]

Of course, you can do, but generally speaking, if you quote an article that is not to explain own point?

Not always.

Data must have, can only say that China's official economic data is generally "accurate", the data also underestimate my point , I think some parts of the tertiary industry not statistically sufficient, because of China's traditional focus on primary and secondary industries.

Yeah, everyone has that problem. Maybe seeking OECD member status would help? (Building an improved monitoring system is a necessary prerequisite.) The Russians are ahead of the Chinese here, they have been trying to do this for a few years now.

 

[dataminer123]

Solomon2, will you stop trolling and shove all your so-called personal opinions from some na-sayers up yours....for good please, your jealousy juice is leaking from your behind, it st...,thanks in advance.

Actually, this brings up a very interesting point. China's GDP number for sure is kind of "man-made" and "unreliable". But from my personal point of view, china's GDP has been underestimated for a while. There were huge amount of gray economy activities happening in china that were never and impossible counted into official statistics, especially those so called third industry or tertiary sector. Other developing countries might have gray economy to some degree but not comparable to the scale of china's. Probably this explains why china's service sector consist much less portion of GDP than other countries.

 

[huzihaidao12]

Not always.

Yeah, everyone has that problem. Maybe seeking OECD member status would help? (Building an improved monitoring system is a necessary prerequisite.) The Russians are ahead of the Chinese here, they have been trying to do this for a few years now.

If that is good for China to join the OECD, I have no objection.

 

[Solomon2]

If you give more shares, I think China will be more money.

The more money a country puts into the pot, the more influence it has. Another hefty contribution may put China in the top five shareholders, which would allow it to directly appoint one of the Bank's executive directors. (The other 182 countries vote among themselves to appoint 19 out of 24 directors.) link

 

[huzihaidao12]

The more money a country puts into the pot, the more influence it has. Another hefty contribution may put China in the top five shareholders, which would allow it to directly appoint one of the Bank's executive directors. (The other 182 countries vote among themselves to appoint 19 out of 24 directors.) link

So, this is not China does not wish to pay more money to take responsibility, but the original shareholders do not have the will.

 

[Solomon2]

So, this is not China does not wish to pay more money to take responsibility, but the original shareholders do not have the will.

I do not understand you. China has strongly implied that its policy of staying out of the top 5 is deliberate, saying that its membership level is part of giving developing countries more influence in international institutions.