Brand New GDP Data from China

The accuracy of data coming out of China came up in class last Thursday.

China released its GDP data for 2020 at the end of last week (see "China Is the Only Major Economy to Report Economic Growth for 2020" in the Wall Street Journal).

It reported growth over the whole year of 2.3%. This is faster than any other large economy this year (see "China Still Grew and Fueled Its Rise as Covid-19 Shook the Global Economy" in the Wall Street Journal).

A somewhat more realistic report is available from the article entitled "China takes victory lap over economic recovery to pre-coronavirus pandemic growth rates" in the South China Morning Post.

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Put simply, these numbers are not credible.

• As is typical, China has produced GDP numbers measuring the flow of net economic activity for the entire year less than 3 weeks after the end of the calendar year. Initial estimates for the U.S. take about twice as long.
• Things may change in the future, but China does not have a history of revising or updating GDP numbers. In the U.S., for example, GDP numbers for each quarter are revised twice before being "finalized" about 3 months after the quarter's end. Those are then revised again at the end of the calendar year. Then those are periodically sharpened up every few years to account for more and better measurements.
• In the U.S., we have some experience with the economic dislocations caused by lockdowns. Yet the lockdowns in the U.S. (and other western countries) were far less severe than those in China.
• China's GDP data is hugely driven by exports to richer developed countries. Those countries are mostly reporting import declines in 2020.
• China's internal numbers on things like retail sales do not match up with an economy expanding at the reported rate.
• Hong Kong is part of China. But as a Special Administrative Region it collects it's data separately. Hong Kong is far smaller and more compact than China, but richer. All of which should make it able to collect its data more quickly. They have yet to report their 4th quarter numbers or their figures for all of 2020.