Interesting new research from the Federal Reserve Bank of
San Francisco:
Fernald, John, Eric Hsu, Mark M. Spiegel. 2015. “Is China Fudging its Figures? Evidence from
Trading Partner Data.” Federal Reserve Bank of San Francisco Working Paper
2015-12. http://www.frbsf.org/economic-research/publications/working-papers/wp2015-12.pdf
Abstract: How reliable are China’s GDP and other
data? We address this question by using trading-partner exports to China as an
independent measure of its economic activity from 2000-2014. We find that the
information content of Chinese GDP improves markedly after 2008. We also
consider a number of plausible, non-GDP indicators of economic activity that
have been identified as alternative Chinese output measures. We find that
activity factors based on the first principal component of sets of indicators
are substantially more informative than GDP alone. The index that best matches
activity in-sample uses four indicators: electricity, rail freight, an index of
raw materials supply, and retail sales. Adding GDP to this group only modestly
improves in-sample performance. Moreover, out of sample, a single activity
factor without GDP proves the most reliable measure of economic activity.
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Related:
A long and rather technical piece from FT: