{"id":21627,"date":"2013-08-14T08:40:33","date_gmt":"2013-08-14T13:40:33","guid":{"rendered":"http:\/\/quotulatiousness.ca\/blog\/?p=21627"},"modified":"2013-08-14T08:40:33","modified_gmt":"2013-08-14T13:40:33","slug":"ignore-the-inconsistencies-in-official-chinese-statistics-at-your-peril","status":"publish","type":"post","link":"https:\/\/quotulatiousness.ca\/blog\/2013\/08\/14\/ignore-the-inconsistencies-in-official-chinese-statistics-at-your-peril\/","title":{"rendered":"Ignore the inconsistencies in official Chinese statistics at your peril"},"content":{"rendered":"<p>It&#8217;s been a while since I reminded everyone that the official Chinese government statistics can&#8217;t be trusted. Here&#8217;s <a href=\"http:\/\/www.zerohedge.com\/news\/2013-08-13\/chinas-1-trillion-gdp-lie\" target=\"_blank\"><em>Zero Hedge<\/em><\/a> on the same topic:<\/p>\n<blockquote><p><strong>How Badly Flawed Is Chinese Economic Data? The Opening Bid is $1 Trillion<\/strong><\/p>\n<p>Baseline Chinese economic data is unreliable. Taking published National Bureau of Statistics China data on the components of consumer price inflation, I attempt to reconcile the official data to third party data. Three problems are apparent in official NBSC data on inflation.<\/p>\n<ul>\n<p><em>First, the base data on housing price inflation is manipulated. According to the NBSC, urban private housing occupants enjoyed a total price increase of only 6% between 2000 and 2011.<\/em><\/p>\n<p><em>Second, while renters faced cumulative price increases in excess of 50% during the same period, the NBSC classifies most Chinese households has private housing occupants making them subject to the significantly lower inflation rate.<\/em><\/p>\n<p><em>Third, despite beginning in the year 2000 with nearly two-thirds of Chinese households in rural areas, the NSBC applies a straight 80\/20 urban\/rural private housing weighting throughout our time sample. This further skews the accuracy of the final data.<\/em><\/p>\n<\/ul>\n<p>To correct for these manipulative practices, I use third party and related NBSC data to better estimate the change in consumer prices in China between 2000 and 2011.<\/p>\n<p>I find that using conservative assumptions about price increases the annual CPI in China by approximately 1%.<\/p>\n<p><strong>This reduces real Chinese GDP by 8-12% or more than $1 trillion in PPP terms.<\/strong><\/p><\/blockquote>\n<p>Regular visitors to the blog know <a href=\"http:\/\/quotulatiousness.ca\/blog\/2013\/07\/27\/jiangsu-might-as-well-be-the-chinese-name-for-detroit\/\" target=\"_blank\">that<\/a> <a href=\"http:\/\/quotulatiousness.ca\/blog\/2013\/06\/19\/even-the-chinese-statistics-office-couldnt-accept-these-numbers\/\" target=\"_blank\">I&#8217;ve<\/a> <a href=\"http:\/\/quotulatiousness.ca\/blog\/2013\/06\/16\/chinese-banks-have-a-hidden-second-balance-sheet\/\" target=\"_blank\">been<\/a> <a href=\"http:\/\/quotulatiousness.ca\/blog\/2012\/07\/13\/questioning-the-accuracy-of-official-chinese-economic-figures\/\" target=\"_blank\">rather<\/a> <a href=\"http:\/\/quotulatiousness.ca\/blog\/2012\/06\/29\/from-maoism-to-kleptocracy-in-one-generation\/\" target=\"_blank\">skeptical<\/a> <a href=\"http:\/\/quotulatiousness.ca\/blog\/2012\/01\/01\/gordon-chang-still-bearish-on-china\/\" target=\"_blank\">about<\/a> <a href=\"http:\/\/quotulatiousness.ca\/blog\/2011\/11\/16\/dont-expect-china-to-save-your-economy\/\" target=\"_blank\">the<\/a> <a href=\"http:\/\/quotulatiousness.ca\/blog\/2011\/05\/18\/china-facing-recession\/\" target=\"_blank\">official<\/a> <a href=\"http:\/\/quotulatiousness.ca\/blog\/2011\/05\/13\/will-chinas-rise-eclipse-the-united-states\/\" target=\"_blank\">statistics<\/a> <a href=\"http:\/\/quotulatiousness.ca\/blog\/2011\/04\/18\/malinvestment-the-next-big-problem-for-china\/\" target=\"_blank\">reported<\/a> <a href=\"http:\/\/quotulatiousness.ca\/blog\/2011\/01\/23\/lawrence-solomon-on-the-coming-crash-in-china\/\" target=\"_blank\">by<\/a> <a href=\"http:\/\/quotulatiousness.ca\/blog\/2010\/12\/07\/chinese-official-acknowledged-that-official-data-is-unreliable\/\" target=\"_blank\">Chinese<\/a> <a href=\"http:\/\/quotulatiousness.ca\/blog\/2010\/07\/15\/reasons-not-to-get-ansty-over-chinas-growth\/\" target=\"_blank\">government<\/a> <a href=\"http:\/\/quotulatiousness.ca\/blog\/2010\/06\/21\/chinas-latest-currency-move\/\" target=\"_blank\">and<\/a> <a href=\"http:\/\/quotulatiousness.ca\/blog\/2010\/03\/17\/superbubble\/\" target=\"_blank\">media<\/a> <a href=\"http:\/\/quotulatiousness.ca\/blog\/2010\/02\/05\/crying-wolf-about-china\/\" target=\"_blank\">sources<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>It&#8217;s been a while since I reminded everyone that the official Chinese government statistics can&#8217;t be trusted. Here&#8217;s Zero Hedge on the same topic: How Badly Flawed Is Chinese Economic Data? The Opening Bid is $1 Trillion Baseline Chinese economic data is unreliable. Taking published National Bureau of Statistics China data on the components of [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[22,25],"tags":[426,165,290],"class_list":["post-21627","post","type-post","status-publish","format-standard","hentry","category-china","category-economics","tag-housing","tag-inflation","tag-statistics"],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p2hpV6-5CP","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts\/21627","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/comments?post=21627"}],"version-history":[{"count":1,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts\/21627\/revisions"}],"predecessor-version":[{"id":21628,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts\/21627\/revisions\/21628"}],"wp:attachment":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/media?parent=21627"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/categories?post=21627"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/tags?post=21627"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}