IDEAS home Printed from https://ideas.repec.org/a/eee/chieco/v30y2014icp309-338.html
   My bibliography  Save this article

The quality of China's GDP statistics

Author

Listed:
  • Holz, Carsten A.

Abstract

Since the 1998 “wind of falsification and embellishment,” Chinese official statistics on gross domestic product (GDP) have repeatedly come under scrutiny. This paper evaluates the quality of China's GDP statistics in four stages. First, it reviews past and ongoing suspicions of the quality of GDP data and examines the evidence. Second, it documents the institutional framework for data compilation and concludes on the implications for data quality. Third, it asks how the Chinese National Bureau of Statistics could possibly go about credibly falsifying GDP data without being found out. Fourth, it examines if the first- and second-digit distributions of official GDP data conform to established data regularities (Benford's Law). The findings are that the supposed evidence for GDP data falsification is not compelling, that the National Bureau of Statistics has much institutional scope for falsifying GDP data, and that certain manipulations of nominal and real data would be virtually undetectable. Official GDP data, however, exhibit few statistical anomalies (conform to Benford's Law) and the National Bureau of Statistics thus either makes no significant use of its scope to falsify data, or is aware of statistical data regularities when it falsifies data.

Suggested Citation

  • Holz, Carsten A., 2014. "The quality of China's GDP statistics," China Economic Review, Elsevier, vol. 30(C), pages 309-338.
  • Handle: RePEc:eee:chieco:v:30:y:2014:i:c:p:309-338
    DOI: 10.1016/j.chieco.2014.06.009
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1043951X14000753
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.chieco.2014.06.009?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Fewster, R. M., 2009. "A Simple Explanation of Benford's Law," The American Statistician, American Statistical Association, vol. 63(1), pages 26-32.
    2. Holz, Carsten A., 2004. "Deconstructing China's GDP statistics," China Economic Review, Elsevier, vol. 15(2), pages 164-202.
    3. Bernhard Rauch & Max Göttsche & Gernot Brähler & Stefan Engel, 2011. "Fact and Fiction in EU‐Governmental Economic Data," German Economic Review, Verein für Socialpolitik, vol. 12(3), pages 243-255, August.
    4. Kasper Bartholdy, 1997. "Old and new problems in the estimation of national accounts in transiton economies1," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 5(1), pages 131-146, May.
    5. Mr. Gonzalo C Pastor Campos & Mr. Jesus R Gonzalez-Garcia, 2009. "Benford’s Law and Macroeconomic Data Quality," IMF Working Papers 2009/010, International Monetary Fund.
    6. Huenemann, Ralph W., 2001. "Are China's recent transport statistics plausible?," China Economic Review, Elsevier, vol. 12(4), pages 368-372.
    7. Andreas Diekmann, 2007. "Not the First Digit! Using Benford's Law to Detect Fraudulent Scientif ic Data," Journal of Applied Statistics, Taylor & Francis Journals, vol. 34(3), pages 321-329.
    8. George Judge & Laura Schechter, 2009. "Detecting Problems in Survey Data Using Benford’s Law," Journal of Human Resources, University of Wisconsin Press, vol. 44(1).
    9. Tomasz Michalski & Gilles Stoltz, 2013. "Do Countries Falsify Economic Data Strategically? Some Evidence That They Might," The Review of Economics and Statistics, MIT Press, vol. 95(2), pages 591-616, May.
    10. Janet Koech & Jian Wang, 2012. "China's slowdown may be worse than official data suggest," Economic Letter, Federal Reserve Bank of Dallas, vol. 7(aug).
    11. Friedrich Schneider & Dominik Enste, 1999. "Shadow Economies Around the World - Size, Causes, and Consequences," CESifo Working Paper Series 196, CESifo.
    12. Harry X. Wu, 2006. "The Chinese GDP Growth Rate Puzzle: How Fast Has the Chinese Economy Grown?," Hi-Stat Discussion Paper Series d06-176, Institute of Economic Research, Hitotsubashi University.
    13. Morrow, John, 2014. "Benford's Law, families of distributions and a test basis," LSE Research Online Documents on Economics 60364, London School of Economics and Political Science, LSE Library.
    14. Holz, Carsten A, 2013. "Chinese statistics: classification systems and data sources," MPRA Paper 43869, University Library of Munich, Germany.
    15. Xu, Xianchun, 2002. "Study on Some Problems in Estimating China's Gross Domestic Product," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 48(2), pages 205-215, June.
    16. Sinclair, Tara M., 2019. "Characteristics and implications of Chinese macroeconomic data revisions," International Journal of Forecasting, Elsevier, vol. 35(3), pages 1108-1117.
    17. John G. Fernald & Israel Malkin & Mark M. Spiegel, 2013. "On the reliability of Chinese output figures," FRBSF Economic Letter, Federal Reserve Bank of San Francisco, issue mar25.
    18. Nye John & Moul Charles, 2007. "The Political Economy of Numbers: On the Application of Benford's Law to International Macroeconomic Statistics," The B.E. Journal of Macroeconomics, De Gruyter, vol. 7(1), pages 1-14, July.
    19. Mehrotra, Aaron & Pääkkönen, Jenni, 2011. "Comparing China's GDP statistics with coincident indicators," Journal of Comparative Economics, Elsevier, vol. 39(3), pages 406-411, September.
    20. Alwyn Young, 2000. "Gold into Base Metals: Productivity Growth in the People's Republic of China during the Reform Period," NBER Working Papers 7856, National Bureau of Economic Research, Inc.
    21. Carsten A. Holz, 2006. "China'S Reform Period Economic Growth: How Reliable Are Angus Maddison'S Estimates? Response To Angus Maddison'S Reply," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 52(3), pages 471-475, September.
    22. Xianchun Xu, 2009. "The Establishment, Reform, And Development Of China'S System Of National Accounts," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 55(s1), pages 442-465, July.
    23. Harry X. Wu, 2007. "The Chinese GDP Growth Rate Puzzle: How Fast Has the Chinese Economy Grown?," Asian Economic Papers, MIT Press, vol. 6(1), pages 1-23, Winter.
    24. David Giles, 2007. "Benford's law and naturally occurring prices in certain ebaY auctions," Applied Economics Letters, Taylor & Francis Journals, vol. 14(3), pages 157-161.
    25. Dominik H. Enste & Friedrich Schneider, 2000. "Shadow Economies: Size, Causes, and Consequences," Journal of Economic Literature, American Economic Association, vol. 38(1), pages 77-114, March.
    26. Harry X. Wu, 2002. "How Fast Has Chinese Industry Grown?—Measuring The Real Output Of Chinese Industry, 1949–97," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 48(2), pages 179-204, June.
    27. Carsten A. Holz, 2006. "CHINA's REFORM PERIOD ECONOMIC GROWTH: HOW RELIABLE ARE ANGUS MADDISON's ESTIMATES?," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 52(1), pages 85-119, March.
    28. Angus Maddison, 2006. "DO OFFICIAL STATISTICS EXAGGERATE CHINA's GDP GROWTH? A REPLY TO CARSTEN HOLZ," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 52(1), pages 121-126, March.
    29. Rawski, Thomas G., 2001. "What is happening to China's GDP statistics?," China Economic Review, Elsevier, vol. 12(4), pages 347-354.
    30. Keidel, Albert, 2001. "China's GDP expenditure accounts," China Economic Review, Elsevier, vol. 12(4), pages 355-367.
    31. BAI, Chong-En & QIAN, Zhenjie, 2010. "The factor income distribution in China: 1978-2007," China Economic Review, Elsevier, vol. 21(4), pages 650-670, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Sinclair, Tara M., 2019. "Characteristics and implications of Chinese macroeconomic data revisions," International Journal of Forecasting, Elsevier, vol. 35(3), pages 1108-1117.
    2. Eeva Kerola, 2019. "In Search of Fluctuations: Another Look at China’s Incredibly Stable GDP Growth Rates," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 61(3), pages 359-380, September.
    3. Xinhua He, 2010. "Noteworthy Discrepancies in China's GDP Accounting," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 18(s1), pages 88-102.
    4. T. Mir, 2016. "The leading digit distribution of the worldwide illicit financial flows," Quality & Quantity: International Journal of Methodology, Springer, vol. 50(1), pages 271-281, January.
    5. T. A. Mir, 2016. "The leading digit distribution of the worldwide illicit financial flows," Quality & Quantity: International Journal of Methodology, Springer, vol. 50(1), pages 271-281, January.
    6. Vadim S. Balashov & Yuxing Yan & Xiaodi Zhu, 2020. "Who Manipulates Data During Pandemics? Evidence from Newcomb-Benford Law," Papers 2007.14841, arXiv.org, revised Jan 2021.
    7. Kerola, Eeva, 2018. "In search of fluctuations : Another look at China’s incredibly stable GDP growth," BOFIT Discussion Papers 23/2018, Bank of Finland, Institute for Economies in Transition.
    8. Montag, Josef, 2017. "Identifying odometer fraud in used car market data," Transport Policy, Elsevier, vol. 60(C), pages 10-23.
    9. Koch, Christoffer & Okamura, Ken, 2020. "Benford’s Law and COVID-19 reporting," Economics Letters, Elsevier, vol. 196(C).
    10. Zhang, Ping & Shi, XunPeng & Sun, YongPing & Cui, Jingbo & Shao, Shuai, 2019. "Have China's provinces achieved their targets of energy intensity reduction? Reassessment based on nighttime lighting data," Energy Policy, Elsevier, vol. 128(C), pages 276-283.
    11. Theoharry Grammatikos & Nikolaos I. Papanikolaou, 2021. "Applying Benford’s Law to Detect Accounting Data Manipulation in the Banking Industry," Journal of Financial Services Research, Springer;Western Finance Association, vol. 59(1), pages 115-142, April.
    12. Holz, Carsten A, 2013. "Monthly industrial output in China since 1983," MPRA Paper 43867, University Library of Munich, Germany.
    13. Montag, Josef, 2015. "Identifying Odometer Fraud: Evidence from the Used Car Market in the Czech Republic," MPRA Paper 65182, University Library of Munich, Germany.
    14. Tariq Ahmad Mir & Marcel Ausloos & Roy Cerqueti, 2014. "Benford's law predicted digit distribution of aggregated income taxes: the surprising conformity of Italian cities and regions," Papers 1410.2890, arXiv.org.
    15. Ioana Sorina Deleanu, 2017. "Do Countries Consistently Engage in Misinforming the International Community about Their Efforts to Combat Money Laundering? Evidence Using Benford’s Law," PLOS ONE, Public Library of Science, vol. 12(1), pages 1-19, January.
    16. Mir, T.A., 2014. "The Benford law behavior of the religious activity data," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 408(C), pages 1-9.
    17. Ma, Ben & Song, Guojun & Zhang, Lei & Sonnenfeld, David A., 2014. "Explaining sectoral discrepancies between national and provincial statistics in China," China Economic Review, Elsevier, vol. 30(C), pages 353-369.
    18. Bernhard Rauch & Max Göttsche & Gernot Brähler & Stefan Engel, 2011. "Fact and Fiction in EU‐Governmental Economic Data," German Economic Review, Verein für Socialpolitik, vol. 12(3), pages 243-255, August.
    19. Ronelle Burger & Canh Thien Dang & Trudy Owens, 2017. "Better performing NGOs do report more accurately: Evidence from investigating Ugandan NGO financial accounts," Discussion Papers 2017-10, University of Nottingham, CREDIT.
    20. Kwan, Fung & Zhang, Yang & Zhuo, Shuaihe, 2018. "Labour reallocation, productivity growth and dualism: The case of China," International Review of Economics & Finance, Elsevier, vol. 57(C), pages 198-210.

    More about this item

    Keywords

    Accuracy of national statistics; National income accounting; Compilation of GDP and sectoral value-added; National statistical system; Benford's Law;
    All these keywords.

    JEL classification:

    • C82 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Macroeconomic Data; Data Access
    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics
    • P27 - Economic Systems - - Socialist Systems and Transition Economies - - - Performance and Prospects
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:chieco:v:30:y:2014:i:c:p:309-338. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: http://www.elsevier.com/locate/chieco .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/chieco .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.