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China's GDP growth may be understated

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  • Clark, Hunter
  • Pinkovskiy, Maxim
  • Sala-i-Martin, Xavier

Abstract

•Using data on nighttime lights, we compute the weights of different Chinese indicators in an optimal index of Chinese economic growth•We find that the Li Keqiang index should be reweighted, with loan growth receiving 60% of the weight and railroad freight growth receiving only 10%.•Our findings are consistent with Chinese growth being higher in 2015 than reported in the official statistics.

Suggested Citation

  • Clark, Hunter & Pinkovskiy, Maxim & Sala-i-Martin, Xavier, 2020. "China's GDP growth may be understated," China Economic Review, Elsevier, vol. 62(C).
    • Handle: RePEc:eee:chieco:v:62:y:2020:i:c:s1043951x18301470
    DOI: 10.1016/j.chieco.2018.10.010
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    1. Elias Papaioannou, 2014. "National Institutions and Subnational Development in Africa," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 129(1), pages 151-213.
    2. Maxim L. Pinkovskiy & Xavier X. Sala-i-Martin, 2016. "Newer need not be better: evaluating the Penn World Tables and the World Development Indicators using nighttime lights," Staff Reports 778, Federal Reserve Bank of New York.
    3. Holz, Carsten A., 2014. "The quality of China's GDP statistics," China Economic Review, Elsevier, vol. 30(C), pages 309-338.
    4. Emi Nakamura & Jón Steinsson & Miao Liu, 2016. "Are Chinese Growth and Inflation Too Smooth? Evidence from Engel Curves," American Economic Journal: Macroeconomics, American Economic Association, vol. 8(3), pages 113-144, July.
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    6. Maxim Pinkovskiy & Xavier Sala-i-Martin, 2016. "Lights, Camera … Income! Illuminating the National Accounts-Household Surveys Debate," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 131(2), pages 579-631.
    7. J. Vernon Henderson & Adam Storeygard & David N. Weil, 2012. "Measuring Economic Growth from Outer Space," American Economic Review, American Economic Association, vol. 102(2), pages 994-1028, April.
    8. Brandt, Loren & Holz, Carsten A, 2006. "Spatial Price Differences in China: Estimates and Implications," Economic Development and Cultural Change, University of Chicago Press, vol. 55(1), pages 43-86, October.
    9. John G. Fernald & Eric Hsu & Mark M. Spiegel, 2015. "Is China fudging its figures? Evidence from trading partner data," Working Paper Series 2015-12, Federal Reserve Bank of San Francisco.
    10. Stelios Michalopoulos & Elias Papaioannou, 2013. "Pre‐Colonial Ethnic Institutions and Contemporary African Development," Econometrica, Econometric Society, vol. 81(1), pages 113-152, January.
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    12. Rawski, Thomas G., 2001. "What is happening to China's GDP statistics?," China Economic Review, Elsevier, vol. 12(4), pages 347-354.
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    Cited by:

    1. Chanda, Areendam & Kabiraj, Sujana, 2020. "Shedding light on regional growth and convergence in India," World Development, Elsevier, vol. 133(C).
    2. Sinclair, Tara M., 2019. "Characteristics and implications of Chinese macroeconomic data revisions," International Journal of Forecasting, Elsevier, vol. 35(3), pages 1108-1117.
    3. Xu, Chen & Bin, Qiu & Shaoqin, Sun, 2021. "Polycentric spatial structure and energy efficiency: Evidence from China's provincial panel data," Energy Policy, Elsevier, vol. 149(C).
    4. Fernald, John G. & Hsu, Eric & Spiegel, Mark M., 2021. "Is China fudging its GDP figures? Evidence from trading partner data," Journal of International Money and Finance, Elsevier, vol. 110(C).
    5. Kong, Qunxi & Guo, Rui & Wang, Yang & Sui, Xiuping & Zhou, Shimin, 2020. "Home-country environment and firms’ outward foreign direct investment decision: Evidence from Chinese firms," Economic Modelling, Elsevier, vol. 85(C), pages 390-399.
    6. Harry X. WU & Zhan LI, 2021. "Reassessing China's GDP Growth Performance: an Exploration of The Underestimated Price Effect," Discussion papers 21018, Research Institute of Economy, Trade and Industry (RIETI).
    7. 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.
    8. Brock, Gregory, 2019. "A remote sensing look at the economy of a Russian region (Rostov) adjacent to the Ukrainian crisis," Journal of Policy Modeling, Elsevier, vol. 41(2), pages 416-431.
    9. Fan Duan & Bulent Unel, 2019. "Persistence of cities: Evidence from China," Review of Development Economics, Wiley Blackwell, vol. 23(2), pages 663-676, May.
    10. Long, Fenjie & Zheng, Longfei & Song, Zhida, 2018. "High-speed rail and urban expansion: An empirical study using a time series of nighttime light satellite data in China," Journal of Transport Geography, Elsevier, vol. 72(C), pages 106-118.
    11. Jérôme TRINH, 2019. "Disaggregating the Chinese annual national accounts to quarterly series," THEMA Working Papers 2019-08, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
    12. José A. Tenreiro Machado & Maria Eugénia Mata & António M. Lopes, 2020. "Fractional Dynamics and Pseudo-Phase Space of Country Economic Processes," Mathematics, MDPI, vol. 8(1), pages 1-17, January.
    13. Zhang, Qi & Hu, Yi & Jiao, Jianbin & Wang, Shouyang, 2023. "Is refined oil price regulation a “shock absorber” for crude oil price shocks?," Energy Policy, Elsevier, vol. 173(C).
    14. Hunter L. Clark & Jeffrey B. Dawson & Maxim L. Pinkovskiy, 2020. "How Stable Is China’s Growth? Shedding Light on Sparse Data," Economic Policy Review, Federal Reserve Bank of New York, vol. 26(4), pages 1-38, October.
    15. Nguyen Doan & Canh Phuc Nguyen & Ilan Noy & Yasuyuki Sawada, 2020. "The Economic Impacts of a Pandemic: What Happened after SARS in 2003?," CESifo Working Paper Series 8687, CESifo.
    16. Liu, Ping & James Hueng, C., 2017. "Measuring real business condition in China," China Economic Review, Elsevier, vol. 46(C), pages 261-274.
    17. Jérôme TRINH, 2019. "Temporal disaggregation of short time series with structural breaks: Estimating quarterly data from yearly emerging economies data," Working Papers 2019-11, Center for Research in Economics and Statistics.
    18. Fernald, John G. & Hsu, Eric & Spiegel, Mark M., 2021. "Reprint: Is China fudging its GDP figures? Evidence from trading partner data," Journal of International Money and Finance, Elsevier, vol. 114(C).

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