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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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    References listed on IDEAS

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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. Pinkovskiy, Maxim L. & Sala-i-Martin, Xavier X., 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.
    4. Stelios Michalopoulos & Elias Papaioannou, 2013. "Pre‐Colonial Ethnic Institutions and Contemporary African Development," Econometrica, Econometric Society, vol. 81(1), pages 113-152, January.
    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. 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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    1. repec:eee:chieco:v:46:y:2017:i:c:p:261-274 is not listed on IDEAS

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    JEL classification:

    • F0 - International Economics - - General

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