Saturday, August 08, 2009

China May Be the World Economy's Engine of Growth, But Are Mr, Han's Gauges Accurate?

Earlier this week, Jamil Anderlini wrote in the Financial Times that "China’s gross domestic product figures" do not add up: "the latest set of first-half numbers provided by provincial-level authorities are far higher than the central government’s national figure, raising fresh questions about the accuracy of statistics in the world’s most populous nation.

"GDP totalled Rmb15,376bn ($2,251bn) in the first half, according to data released individually by China’s 31 provinces and municipalities, 10 per cent higher than the official first-half GDP figure of Rmb13,986bn published by the National Bureau of Statistics.

"All but seven of the regions reported GDP growth rates above the bureau’s first-half figure of 7.1 per cent. At the start of the year, Beijing set 8 per cent as China’s growth target for the year. [read more]"

Since China is becoming such an important economy, what its economy does moves world stock markets. Given commentators' cult of GDP as a metric, the shakiness of China's national income accounts drives prudent investors to their worry beads.

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