March 24, 2023

How Do You Know Where You’re Going If You Don’t Know Where You Are? (China Statistics Edition)

A question becoming increasingly relevant as China cuts down on statistical releases. From Burn-Murdoch at FT:

In this context, one can see the recent delay of Q3 GDP release as emblematic of a constant process of dismantling the technocratic components of financial management in China. We will probably need to rely increasingly more on alternative ways of estimating Chinese financial activity, as in satellite imagery of nighttime lighting, or alternative composites of reported economic indicators (Li Keqiang index).
For a recap, here are the nowcasts and forecasts of reported GDP (that is, attempting to anticipate what authorities GDP will be reported as, not what real activity may be), from this post.

Figure 1: China GDP (black), Bloomberg agreement since 10/17 (sky blue square), Goldman Sachs since 10/11 (brown triangle), and IMF World Economic Outlook October 2022 projections (red square), mn 2020CNY, quarterly rates. ECRI peak-to-trough recession dates shaded gray. Source: IMF, International Financial Statistics, Bloomberg (October 17, 2022), Goldman Sachs “Top of Mind” (10/11) and IMF World Economic Outlook, October 2022, ECRI, and authors computations.
While several observers have actually kept in mind that in current years, Chinese GDP movements at organization cycle frequencies have actually matched what other indicators are recommending, in the most current quarters, there has been some apprehension evidenced (see this post).
In some ways, the problem presented by reduced reporting of low frequency signs will make it harder to examine pattern development in output. Here, see Martinezs (2022) Figure 6, which reveals that over the 1992-2012 period, Chinas official growth was almost 200%, while approximated from satellite information, was 120% (second bar from the left in panel (a), 3rd bar from the left in panel (b)).

Source: Martinez (2022 ), ungated Working Paper version


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