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China's GDP Growth Pace Was Inflated for Nine Years, Study Finds

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Re: China's GDP Growth Pace Was Inflated for Nine Years, Study Finds

#81

Post by XuMiao »

wholien wrote: post #66

Eh, it's really actually pretty hard to calculate GDPs. Many countries can't get within 1% due to reasons, so 1.6% per year isn't that big of a difference. China also has interesting accounting systems that actually might under-count the GDP, for example the GDP calculations mostly ignore the GDP of small firms. > Companies with annual revenue below 360k RMB (roughly 53k USD) are exempt from VAT tax and all subsequen…

Very reasonable comments.

I don't know why some people are so emotional about China. Sounds like they have lost something in their lifes.

An adult conversation is a fact driven conversation. That is the basic culture for HN v.s. places like reddit.

GDP is a manipulable number that has lost its accurate meaning. Even the ratings of the TVs have multi-aspects now.

Re: China's GDP Growth Pace Was Inflated for Nine Years, Study Finds

#82

Post by ddebernardy »

JumpCrisscross wrote: post #19
ddebernardy wrote: post #7

Economists (e.g. Michael Pettis) were already calling China out for its long history inflated numbers when the 2007-2009 crisis erupted. Perhaps this view might go mainstream with the looming recession?

> Perhaps this view might go mainstream with the looming recession? Nobody, including Beijing, took China’s official statistics at face value. What’s novel in this work is the larger-than-expected magnitude of the error.

The article mentions China overstated its growth by an average of 1.7 percentage points per year since 2008.

Best I recollect from back when I was reading Pettis' blog on a regular basis, that figure is actually lower than what he was been suggesting China had been overstating its growth by in the decade prior to 2008.

Pettis is about as specialized in China financial markets as you can get, having basically studied and blogging about the stuff exclusively insofar as I'm aware while living and teaching finance there. He has many criticisms of how China is reporting numbers. One in particular is that local officials are expected to meet certain GDP targets. When the numbers don't look like they'll be in, they'll take on debt and build a bridge to nowhere to make their numbers.

The point being, from where I'm standing from there doesn't seem to be anything new in the magnitude of the error. (It's great if the article made you privy about how overstated the economy was.)

Re: China's GDP Growth Pace Was Inflated for Nine Years, Study Finds

#83

Post by majia »

abvdasker wrote: post #35
resters wrote: post #16

Consider that Fannie and Freddie were allowed not to provide detailed financials to congress for several years in a row preceding the 2008 housing collapse. It's not a matter of "oh wow, a major government fudges numbers", it's "how many major ways in which my government fudges numbers might I not be aware of?"

Not going to dispute the facts of this comment, but to me this sounds like whataboutism, wherein the commenter tries to neutralize criticism by creating an equivalency with other entities which might be worthy of the same criticism. It's a rhetorical strategy that seems to come up a lot on the internet, especially when the CCP is the subject. https://en.wikipedia.org/wiki/Whataboutism

This seems a straw man argument. Whataboutism is not necessarily to neutralize critism. It is to show that sometimes China or a particular entity is held to a unreasonably high standard. How high the standard for GDP calculation is for debate, but we should not dismiss an argument by labeling it as whataboutism.

Re: China's GDP Growth Pace Was Inflated for Nine Years, Study Finds

#84

Post by coliveira »

steve19 wrote: post #28
coliveira wrote: post #23

All countries inflate GDP, because there is always a gap of uncertainty about existing economic activity and governments like larger numbers. And since Chinese growth is higher than in other parts of the world, it is normal that the gap be larger, in the range of 1%.

I don't think this is true. Certainly in many countries GDP calculations are transparent. The economists calculating them are bureaucrats who serve the government, not whichever party is currently in power.

Oh, right, the same kind of people who gave AAA status to mortgage based derivatives. You must live in a different world, then.

Re: China's GDP Growth Pace Was Inflated for Nine Years, Study Finds

#85

Post by ido »

dis-sys wrote: post #69
ido wrote: post #60

Earlier quoted context omitted.

China is huge and heterogeneous - the coastal cities are well developed and there are 100s of millions of people living in Shanghai, Beijing, Hong-Kong, Shenzhen etc who are well on their way towards western level of development. For example the Yangtze River Delta has more than 100m people (more than any European country) and GPD(PPP) per capita similar to Italy: https://en.wikipedia.org/wiki/Yangtze_River_Delta

> For example the Yangtze River Delta has more than 100m people (more than any European country) and GPD(PPP) per capita similar to Italy I won't make such comment by completely ignoring the wellbeings of other hundreds million people who live just a couple hours drive from the so called Yangtze River Delta. To name a few examples - Anhui province is so poor to the extent that it is offensive to ask people questions…

And the Ukraine is just 500km from Vienna. I don't dispute China is a developing country, I just think a lot of westerners don't realize how huge and - in parts - how developed it is.

People hear "China is a developing country" and think it's comparable to countries like Bangladesh or Cambodia. But the tier-1 cities and their peripheries are not some tiny enclaves of wealth like Singapore, they are huge - bigger than major European countries.

The fact that poor/undeveloped areas are relatively nearby does not make them less developed than the fact that Moldova and Kosovo are in the EU's backyard make Germany undeveloped.

Re: China's GDP Growth Pace Was Inflated for Nine Years, Study Finds

#86

Post by chewz »

dis-sys wrote: post #69
ido wrote: post #60

Earlier quoted context omitted.

China is huge and heterogeneous - the coastal cities are well developed and there are 100s of millions of people living in Shanghai, Beijing, Hong-Kong, Shenzhen etc who are well on their way towards western level of development. For example the Yangtze River Delta has more than 100m people (more than any European country) and GPD(PPP) per capita similar to Italy: https://en.wikipedia.org/wiki/Yangtze_River_Delta

> For example the Yangtze River Delta has more than 100m people (more than any European country) and GPD(PPP) per capita similar to Italy I won't make such comment by completely ignoring the wellbeings of other hundreds million people who live just a couple hours drive from the so called Yangtze River Delta. To name a few examples - Anhui province is so poor to the extent that it is offensive to ask people questions…

> When the GDP per capita is below world average, how it is not a poor country significantly under developed??

Perhaps cause it is not possible that every person in the world would be living above world average? Especially in the country that is home to almost 1/6 of total world population.

In many countries there are huge regional differences but I hope that after 30 years of growth even people living in poor provinces of China are better off. Even if the statistics are trumped up for propaganda reasons.

Re: China's GDP Growth Pace Was Inflated for Nine Years, Study Finds

#87

Post by ksec »

dis-sys wrote: post #39
seanmcdirmid wrote: post #4

Not surprising at all, the government is uncannily accurate in their prediction (growth will be 6.9% this year, at the end of the year: hey look, we did it!). Kind of like how almost every province usually has a 4.0% unemployment rate. That isn't to say China's GDP hasn't been growing, just that the numbers are always being fudged one way or the other. They used to even fudge the numbers down (growth higher than repo…

> It is ironic that Li Keqiang is premiere (#2) but Xi Jinping has decided not to use his index ( https://en.wikipedia.org/wiki/Li_Keqiang_index ) that gets around fudging with more accurate statistics. Li Keqiang Index has three components, electricity consumption, railway cargo volume and bank loans. They all had pretty good growth, e.g. https://www.caixinglobal.com/2018-12-06/china-railway-corp-s... https://www.ca…

And here is an article about Debt in China. [1] While you can bet those number aren't 100% accurate, you can see the overall picture isn't so bad. Unless they are off by an order of magnitude, which I seriously doubt that will be the case.

This doesn't mean I am pro China in anything. Just stating some alternative views. I just wish they open up their market and level up the playing field for foreign companies.

[1] https://viewfromthewilds.blogspot.com/2019/03/v-behaviorurld...

Re: China's GDP Growth Pace Was Inflated for Nine Years, Study Finds

#89

Post by seanmcdirmid »

ido wrote: post #85
dis-sys wrote: post #69

Earlier quoted context omitted.

> For example the Yangtze River Delta has more than 100m people (more than any European country) and GPD(PPP) per capita similar to Italy I won't make such comment by completely ignoring the wellbeings of other hundreds million people who live just a couple hours drive from the so called Yangtze River Delta. To name a few examples - Anhui province is so poor to the extent that it is offensive to ask people questions…

And the Ukraine is just 500km from Vienna. I don't dispute China is a developing country, I just think a lot of westerners don't realize how huge and - in parts - how developed it is. People hear "China is a developing country" and think it's comparable to countries like Bangladesh or Cambodia. But the tier-1 cities and their peripheries are not some tiny enclaves of wealth like Singapore, they are huge - bigger than…

China is upper middle income, so its wealth is comparable to Mexico, Brazil, and Thailand. Now, many people don't really get how rich those countries are either (e.g. many Americans think Mexico is an undeveloped struggling place when they are biased by a borderlands and illegal immigrants that are very different from the rest of Mexico).

Re: China's GDP Growth Pace Was Inflated for Nine Years, Study Finds

#90

Post by hungryhobo »

refurb wrote: post #79
hungryhobo wrote: post #74

Earlier quoted context omitted.

which is exactly why trump's trade war is do ridiculous, china is still a developing country, let her enjoy her developing country benefits

Just because you’re trading with a developing country doesn’t mean you should agree to unfair trade practices.

unfair how? certainly not according to WTO
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