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China's GDP Growth May be Understated

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

Abstract

Concerns about the quality of China’s official GDP statistics have been a perennial question in understanding its economic dynamics. We use data on satellite-recorded nighttime lights as an independent benchmark for comparing various published indicators of the state of the Chinese economy. Using the methodology of Pinkovskiy and Sala-i-Martin (2016a and b), we exploit nighttime lights to compute the optimal weights for various Chinese economic indicators in a best unbiased predictor of Chinese growth rates. Our computations of Chinese growth based on optimal weightings of various combinations of economic indicators provide evidence against the hypothesis that the Chinese economy contracted precipitously in late 2015, and are consistent with the rate of Chinese growth being higher than is reported in the official statistics.

Suggested Citation

  • Hunter Clark & Maxim Pinkovskiy & Xavier Sala-i-Martin, 2017. "China's GDP Growth May be Understated," NBER Working Papers 23323, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:23323
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    1. Elias Papaioannou, 2014. "National Institutions and Subnational Development in Africa," The Quarterly Journal of Economics, Oxford University Press, 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. 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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    5. Rawski, Thomas G., 2001. "What is happening to China's GDP statistics?," China Economic Review, Elsevier, vol. 12(4), pages 347-354.
    6. Fernald, John & Hsu, Eric & Spiegel, Mark M., 2015. "Is China fudging its figures? Evidence from trading partner data," BOFIT Discussion Papers 29/2015, Bank of Finland, Institute for Economies in Transition.
    7. Holz, Carsten A., 2014. "The quality of China's GDP statistics," China Economic Review, Elsevier, vol. 30(C), pages 309-338.
    8. Maxim Pinkovskiy & Xavier Sala-i-Martin, 2016. "Lights, Camera … Income! Illuminating the National Accounts-Household Surveys Debate," The Quarterly Journal of Economics, Oxford University Press, vol. 131(2), pages 579-631.
    9. 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.
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    11. repec:bof:bofitp:urn:nbn:fi:bof-201511031430 is not listed on IDEAS
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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. 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.
    4. 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.
    5. 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.
    6. Fan Duan & Bulent Unel, 2017. "Persistence of Cities: Evidence from China," Departmental Working Papers 2017-08, Department of Economics, Louisiana State University.
    7. 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.
    8. Jérôme TRINH, 2019. "Temporal disaggregation of short time series with structural breaks: Estimating quarterly data from yearly emerging economies data," THEMA Working Papers 2019-08, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
    9. 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.
    10. Liu, Ping & James Hueng, C., 2017. "Measuring real business condition in China," China Economic Review, Elsevier, vol. 46(C), pages 261-274.
    11. 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.

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