Beijing is very likely exaggerating GDP growth, says Heritage Foundation
Posted By Neelam Mathews Jan 17, 2012 By- Derek Scissors, Ph.D. is Research Fellow in Asia Economic Policy in the Asian Studies Center at The Heritage Foundation. (Edited) China today announced that GDP growth for 2011 slowed to 9.2 percent. Over the next days and weeks, there will be a stream of pontificating about what this means. There’s a good chance that everyone involved will be pontificating about nonsense. China ’s economic statistics are usually inconsistent, occasionally wildly inconsistent, and do not seem to be improving in quality. For 2011 GDP in particular, Beijing is very likely exaggerating growth (some years it understates). Rather than focusing on reported figures, the U.S. should prepare for a weak Chinese economy but one that may begin to rebalance in 2012. It should also engage in long-overdue independent estimation of China’s performance. Impeaching The Growth Result There is a cottage industry that gains directly or indirectly from insisting that C...