China’s growth data may mask economic risks

16th January, 2019 09:36:25 printer

SHANGHAI: China’s GDP growth may be significantly slower than official estimates suggest and its economy more vulnerable to external shocks than widely believed, a global business think tank has warned.

Data due next week is expected to show the world’s number-two economy expanded around 6.5 percent last year, its slowest rate in almost three decades as a global slowdown and the US trade war bite, reports AFP.

But even that is well above the 4.1 percent the US-based Conference Board, which provides research to member-businesses and organisations worldwide, says its methodology indicates.

Economists in China and abroad have long suspected data is massaged upward, often noting that full-year gross domestic product hits Beijing’s pre-set targets with suspicious regularity.

The governor of northeastern Liaoning admitted in 2017 that the industrial province had falsified data for years.

Even current Premier Li Keqiang said in 2007, when he was Liaoning’s top political official, that results were often “man-made” and he used his own calculations to guide provincial policymaking, according to a confidential memo released by WikiLeaks. The Conference Board, whose research is widely tracked by investors and policymakers, began making its alternative China figures public in 2014.

David Hoffman, its senior vice president for the Asia-Pacific, said Chinese data reporting problems do not factor into the Board’s calculations.