The Truth About China's GDP
WikiLeaks reveals the famously high numbers in the high-growth country may be inflated
China's famously booming GDP statistics are, according to yet another WikiLeaks cable released last week, not exactly real. Li Keqiang, a senior Chinese official and rumored front runner for the prime minister's chair, is quoted in the cable as having referred to the country's GDP numbers as "man-made" and "therefore unreliable." The Telegraph reports that "Chinese officials have repeatedly been found to have artificially inflated their local GDP figures in order to win face and hit their targets," and that, "on several occasions, the sum of all China's local GDP tallies added up to more than the national statistic."
This revelation might seem shocking, but those who have followed China's economy closely are not surprised to find out the books have been cooked.
- Called It! "Anyone watching China should know the numbers are very edgy," Robert Wenzel writes, referring to his own a recent blogpost on Economic Policy Journal in which he wrote, that "China's real estate market appears to be on the edge of breaking down. It is very difficult to get reliable numbers out of China, so it is often best just to look at the anecdotal evidence."
- Not Exactly News Economic reports on China have hinted at something fishy for past couple of years. Yves Smith at Naked Capitalism agrees that, "this WikiLeaks release, like so many others, is not news to anyone who has been on this beat," and links to some of the articles that have kept her in the know.
- It All Makes Sense Now James Pethokoukis at Reuters makes the connection between China's fictional statistics and previous reports of ghost towns and giant empty malls that create the impression of a thriving population and commercial culture.
- Look Out, Assange Tracy Alloway at Financial Times Alphaville warns that "WikiLeaks, fresh from angering US authorities, might be about to incur the wrath of China's economic establishment."