Accounting “forensics” show that Chinese GDP growth from 2008-2016 is 1.7pp lower and investment and savings rate in 2016 is 7pp than what was officially reported.

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China’s national accounts are based on data collected by local governments. However, since local governments are rewarded for meeting growth and investment targets, they have an incentive to skew local statistics. China’s National Bureau of Statistics (NBS) adjusts the data provided by local governments to calculate GDP at the national level. The adjustments made by the NBS average 5% of GDP since the mid-2000s. On the production side, the discrepancy between local and aggregate GDP is entirely driven by the gap between local and national estimates of industrial output. On the expenditure side, the gap is in investment. Local statistics increasingly misrepresent the true numbers after 2008, but there was no corresponding change in the adjustment made by the NBS. We provide revised estimates of local and national GDP by re-estimating output of industrial, wholesale, and retail firms using data on value-added taxes. We also use several local economic indicators that are less likely to be manipulated by local governments to estimate local and aggregate GDP. The estimates also suggest that the adjustments by the NBS were insufficient after 2008. Relative to the official numbers, we estimate that GDP growth from 2008-2016 is 1.7 percentage points lower and the investment and savings rate in 2016 is 7 percentage points lower.

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Chen, Wei, Xilu Chen, Chang-Tai Hseih and Zheng (Michael) Song. 2019. “A Forensic Examination of China’s National Accounts” BPEA Conference Draft, Spring.


Chang-Tai Hsieh is the Phyllis and Irwin Winkelried Professor of Economics at the University of Chicago; Wei Chen and Xilu Chen are students, and Zheng (Michael) Song is a Distinguished Visiting Professor at Tsinghua University and Professor at the Department of Economics of the Chinese University of Hong Kong, where Wei Chen and Xilu Chen are also PhD students. Beyond these affiliations, Dr. Song received financial support from the General Research Council of Hong Kong, and the remaining authors did not receive financial support from any firm or person for this paper or from any firm or person with a financial or political interest in this paper. They are currently not officers, directors, or board members of any organization with an interest in this paper. No outside party had the right to review this paper before circulation. The views expressed in this paper are those of the authors, and do not necessarily reflect those of the University of Chicago, Tsinghua University, or the Chinese University of Hong Kong.

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