Holz, Carsten (2013): The Quality of China's GDP Statistics.
Preview |
PDF
MPRA_paper_51864.pdf Download (745kB) | Preview |
Abstract
Since the 1998 “wind of falsification and embellishment,” Chinese official GDP statistics have repeatedly come under scrutiny. This paper evaluates the quality of China’s GDP statistics in four stages. First, it reviews past and ongoing suspicions of the quality of GDP data and examines the evidence. Second, it documents the institutional framework for data compilation and concludes on the implications for data quality. Third, it asks how the National Bureau of Statistics could possibly go about credibly falsifying GDP data without being found out. Fourth, it examines if the first-and second-digit distributions of official GDP data conform to established data regularities (Benford’s Law). The findings are that the supposed evidence for GDP data falsification is not compelling, that the NBS has much institutional scope for falsifying GDP data, and that certain manipulations of nominal and real data would be virtually undetectable. Official GDP data, however, exhibit few statistical anomalies (conform to Benford’s Law) and the NBS thus either makes no significant use of its scope to falsify data, or is aware of statistical data regularities when it falsifies data.
Item Type: | MPRA Paper |
---|---|
Original Title: | The Quality of China's GDP Statistics |
Language: | English |
Keywords: | accuracy of national statistics; national income accounting; compilation of GDP and sectoral value-added, national statistical system; Benford’s Law |
Subjects: | C - Mathematical and Quantitative Methods > C8 - Data Collection and Data Estimation Methodology ; Computer Programs > C82 - Methodology for Collecting, Estimating, and Organizing Macroeconomic Data ; Data Access O - Economic Development, Innovation, Technological Change, and Growth > O5 - Economywide Country Studies > O53 - Asia including Middle East P - Economic Systems > P2 - Socialist Systems and Transitional Economies > P27 - Performance and Prospects R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R1 - General Regional Economics |
Item ID: | 51864 |
Depositing User: | Carsten Holz |
Date Deposited: | 26 Jan 2014 17:49 |
Last Modified: | 27 Sep 2019 12:17 |
References: | Bartholdy, Kasper. “Old and New Problems in the Estimation of National Accounts in Transition Economies.” Economics of Transition 5, no. 1 (May 1997): 131-46. BAI Chong-en, and QIAN Zhenjie. “Guomin shouru de yaosu fenpei: tongji shuju beihou de gushi” (Factor contribution: the story behind the numbers). Unpublished and undated manuscript, obtained December 2009. BAI Chong-en, and QIAN Zhenjie. “The Factor Distribution in China: 1978-2007.” China Economic Review 21, no. 4 (Dec. 2010): 650-70. BEA (Bureau of Economic Analysis). 2013. “2013 Comprehensive Revision of the National Income and Product Accounts,” at http://www.bea.gov/national/an1.htm#2013comprehensive (especially first item, “Briefing”), accessed 20 September 2013. Benford, Frank. “The Law of Anomalous Numbers.” Proceedings of the American Philosophical Society 78, no. 4 (31 March 1938): 551-72. Browne, Malcom. W. “Following Benford’s Law, or Looking Out for No. 1.” At http://www.rexswain.com/benford.html, last accessed 15 January 2013. CAI Yongshun. “Between State and Peasant: Local Cadres and Statistical Reporting in Rural China.” The China Quarterly, no. 163 (Sept. 2000): 783-805. China Infobank (at http://www.chinainfobank.com). “Yuce zhongguo ‘bu ke cesuan de jingji’ zhan GDP de bizhong yue wei 10%” (The ‘economic activities that cannot be estimated’ are estimated to be equivalent to 10% of GDP). 7 June 2003. Cho, Wendy K. Tam, and Brian J. Gaines. “Breaking the (Benford) Law.” The American Statistician 61, no. 3 (August 2007): 218-23. Chow, Gregory C. “Chinese Statistics.” The American Statistician 40, no. 3 (1986): 191-6. Deckert, Joseph, Mikhail Myagkov, and Peter C. Ordeshook. “Benford’s Law and the Detection of Election Fraud.” Political Analysis 19, no. 3 (2011): 235-68. Diekmann, Andreas. “Not the First Digit! Using Benford’s Law to Detect Fraudulent Scientific Data.” Journal of Applied Statistics 34, no. 3 (April 2007): 321-9. Durtschi, Cindy, William Hillison, and Carl Pacini. “The Effective Use of Benford’s Law to Assist in Detecting Fraud in Accounting Data.” Journal of Forensic Accounting V, no 1 (2004): 17-34. Economics Dictionary: Statistics. Jingji da cijian tongjijuan (Big Economics Dictionary, Statistics Volume). Shanghai: Shanghai cishu chubanshe, 1996. Edin, Maria. “Why Do Chinese Local Cadres Promote Growth? Institutional Incentives and Constraints of Local Cadres.” Forum for Development Studies, no. 1 (1998): 97-127. el Sehity, Tarek, Erik Hoelzl, and Erich Kirchler. “Price Developments after a Nominal Shock: Benford’s Law and Psychological Pricing after the Euro Introduction.” International Journal of Research in Marketing 22, no. 4 (December 2005): 471-80. Fernald, John, Israel Malkin, and Mark Spiegel. “On the Reliability of Chinese Output Figures.” FRBSF Economic Letter 2013-08, 25 March 2013, 5pp. Fewster, R.M. “A Simple Explanatoin of Benford’s Law.” The American Statistican 63, no. 1 (2009): 26-32. Finance Ministry (General Office). Xianxing caiwu kuaiji zhidu quanshu (Complete current financial accounting system). Two volumes. Beijing: Zhongguo caizheng jingji chubanshe, 1999. GDP 1952-96. Zhongguo guonei shengchan zongzhi hesuan lishi ziliao (zhaiyao) (Historical Data on China’s Gross Domestic Product 1952-1995 (Summary)). Beijing: Zhongguo tongji chubanshe, 1998. Giles, David E. “Benford’s Law and Naturally Occurring Prices in Certain ebaY Auctions.” Applied Economics Letters 14, no. 3 (2007): 157-61. Gonzalez-Garcia, Jesus, and Gonzalo Pastor. “Benford’s Law and Macroeconomic Data Quality.” IMF Working Paper WP/09/10 (January 2009). Günnel, Stefan, and Karl-Heinz Tödter. “Does Benford’s Law Hold in Economic Research and Forecasting?” Empirica 36, no. 3 (August 2009): 273-92. GUO Tan, and YI Xiaobo. “Zhongguo dixia jingji guimo jiben cesuan he shizheng fenxi” (Basic estimation of the size of China’s underground economy and a positive analysis). Gongye jishu jingji 25, no. 11 (Nov. 2006): 129-32. Hill, Theodore P. “Base-Invariance Implies Benford’s Law.” Proceedings of the American Mathematical Society 123, no. 3 (March 1995a): 887-95. Hill, Theodore P. “The Significant-Digit Phenomenon.” The American Mathematical Monthly 102, no. 4 (April 1995b): 322-7. Hill, Theodore P. “A Statistical Derivation of the Significant-Digit Law.” Statistical Science 10, no. 4 (Nov. 1995c): 354-63. Hill, Theodore P. “The First Digit Phenomenon: A Century-old Observation about an Unexpected Pattern in Many Numerical Tables Applies to the Stock Market, Census Statistics and Accounting Data.” American Scientist 86, no. 4 (July-August 1998): 358-63. Holz, Carsten A. “‘Fast, Clear and Accurate:’ How Reliable Are Chinese Output and Economic Growth Statistics?” The China Quarterly, no. 173 (March 2003): 122-63. Holz, Carsten A. “Deconstructing China’s GDP Statistics.” China Economic Review 15, no. 2 (2004): 164-202. Holz, Carsten A. “China’s Reform Period Economic Growth: How Reliable Are Angus Maddison’s Estimates? Review of Income and Wealth 52, no. 1 (March 2006a): 85-119. Holz, Carsten A. “China’s Reform Period Economic Growth: How Reliable Are Angus Maddison’s Estimates? Response to Angus Maddison’s Reply.” Review of Income and Wealth 52, no. 3 (Sept. 2006b): 471-5. Holz, Carsten A. “Chinese Statistics: Classification Systems and Data Sources.” Stanford Center for International Development Working Paper No. 471, Stanford University, 8 January 2013(a). Holz, Carsten A. “Chinese Statistics: Output Data.” Stanford Center for International Development Working Paper No. 473, Stanford University, 1 March 2013(b). Holz, Carsten A. “Measuring Productivity Growth in China, 1952-2011.” Mimeo, Stanford Center for International Development. 2013(c). Holz, Carsten A., and Yi-min Lin. “Pitfalls of China’s Industrial Statistics: Inconsistencies and Specification Problems.” The China Review 1, no. 1 (Fall 2001): 29-71. Huenemann, Ralph W. “Are China’s Recent Transport Statistics Plausible?” China Economic Review 12, no. 4 (2001): 368-72. ¬ Input-Output Tables 1997. Zhongguo touru chanchubiao 1997 (Input-Output Tables of China 1997). Beijing: Zhongguo tongji chubanshe, 1999. Input-Output Tables 2007. Zhongguo touru chanchubiao 2007 (Input-Output Tables of China 2007). Beijing: Zhongguo tongji chubanshe, 2009. Judge, George, and Laura Schechter. “Detecing Problems in Survey Data Using Benford’s Law.” The Journal of Human Resources 44, no. 1 (Winter 2009): 1-24. Keidel, Albert. Keidel, Albert. “China’s GDP Expenditure Accounts.” China Economic Review 12, no. 4 (2001b): 355-67. Klein, Lawrence, and Suleyman Ozmucur. “The Estimation of China’s Economic Growth Rate.” Journal of Economic and Social Measurement 28, no. 4 (2002-2003):187-202. Koech, Janet, and Jian Wang. “China’s Slowdown May Be Worse Than Official Data Suggest.” Federal Reserve Bank of Dallas, Economic Letter 7, no. 8 (Aug. 2012): 1-4.) Koen, Vincent. “Russian Macroeconomic Data: Existence, Access, Interpretation.” Communist Economies & Economic Transformation 8, no. 3 (Sept. 1996): 321-33. Leemis, Lawrence M., Bruce W. Schmeiser, and Diane L. Evans. “Survival Distributions Satisfying Benford’s Law.” The American Statistician 54, no. 4 (November 2000): 236-41. Li Choh-Ming. The Statistical System of Communist China. Berkeley: University of California Press, 1962. LIU Hua, ZHANG Weiwei, and LIAO Fugang. “Jiyu xianjin bilu moxing gaijin de wo guo dixia jingji guimo cesuan” (Estimate of the size of China’s underground economy based on an improved cash ratio model). Wuhan ligong daxue xuebao 29, no 1 (Jan. 2007): 138-40. Maddison, Angus. Chinese Economic Performance in the Long Run. Paris: Development Centre of the Organisation for Economic Co-operation and Development, 1998. Mehrotra, Aaron, and Pääkkönen. “Comparing China’s GDP Statistics with Coincident Indicators.” Journal of Comparative Economics 39 (2011): 406-11. MENG Lian and WANG Xiaolu. “Dui zhongguo jingji zengzhang tongji shuju kexindu de guji” (An evaluation of the reliability of China’s statistics on economic growth). Jingji yanjiu, no. 10 (Oct. 2000): 3-13. Michalski, Tomasz, and Gilles Stoltz. “Do Countries Falsify Economic Data Strategically? Some Evidence That They Might.” Review of Economics and Statistics 95, no. 2 (May 2013): 591-616. Morrow, John. “Benford’s Law, Families of Distributions and a Test Basis.” Mimeo, 9 October 2010. Movshuk, Oleksandr. “The Reliability of China’s Growth Figures: A Survey of Recent Statistical Controversies.” The Journal of Econometric Study of Northeast Asia 4, no. 1 (2002): 31-45. NBS (National Bureau of Statistics). 1997. Zhongguo niandu guonei shengchan zongzhi jisuan fangfa (Calculation method of China’s annual gross domestic product). NBS National Income Accounts Division. Beijing: Zhongguo tongji chubanshe. (This is one of seven small volumes explaining compilation practices of different NIPA statistics in China.) NBS (National Bureau of Statistics). 2001. Zhongguo guonei shengchan zongzhi hesuan shouce (GDP accounting manual). No publishing house information or date; presumably an internal volume. NBS (National Bureau of Statistics). 2003. Guojia tongji diaocha zhidu 2003 (National statistical survey system 2003). No publishing house information or date; presumably an internal volume. NBS (National Bureau of Statistics). 2007. Zhongguo jingji pucha niandu guonei shengchan zongzhi hesuan fangfa (Calculation method of China’s annual gross domestic product from China’s economic census). NBS National Income Accounts Division. Beijing: Zhongguo tongji chubanshe, 2007. NBS (National Bureau of Statistics). 2011. 2011 Guomin jingji hangye fenlei zhushi (2011 National sectoral classification scheme). Beijing: Zhongguo tongji chubanshe, 2011 NBS Industry and Transport Division. “Gongye zengzhang sudu zhong de ‘shuifen’ you duoda?” (How big is the ‘water content’ in industrial growth?), Jingji yanjiu cankao ziliao, no. 42 (19 March 1989): 2-5. NBS Statistical Design and Administration Division. Guanyu tongji shang ruhe fanying suoyouzhi jiegou wenti de yanjiu (How to reflect the issue of ownership structure in the statistics). Beijing: Zhongguo tongji chubanshe, 1999. Newcomb, Simon. “Note on the Frequence of Use of the Different Digits in Natural Numbers.” American Journal of Mathematics 4, no. 1/4 (1881): 39-40. Nigrini, Mark J. “A Taxpayer Compliance Application of Benford’s Law.” Journal of the American Taxation Association 18, no. 1 (Spring 1996): 72-91. Nigrini, Mark J. Benford’s Law: Applications for Forensic Accounting, Auditing, and Fraud Detection. Hoboken, N.J.: John Wiley & Sons, 2012. NPC (National People’s Congress and its Standing Committee). 8 December 1983. “Zhonghua renmin gongheguo tongji fa” (PRC Statistics Law), in China Infobank. NPC (National People’s Congress and its Standing Committee). 15 May 1996. “Zhonghua renmin gongheguo tongji fa” (PRC Statistics Law), revision of original 8 December 1983 law, in China Infobank. NPC (National People’s Congress and its Standing Committee). 27 June 2009. “Zhonghua renmin gongheguo tongji fa” (PRC Statistics Law), revision of 15 May 1996 law. At http://www.npc.gov.cn/npc/xinwen/lfgz/zxfl/2009-06/27/content_1508548.htm, accessed 11 September 2009. Nye, John, and Charles Moul. “The Political Economy of Numbers: On the Application of Benford’s Law to International Macroeconomic Statistics.” The B.E. Journal of Macroeconomics 7, no. 1, Article 17 (July 2007), 14pp. Orlik, Tom. Understanding China’s Economic Indicators:Translating the Data into Investment Opportunities. Upper Saddle River, NJ: FT Press Science, 2012. Perkins, Dwight H. Market Control and Planning in Communist China. Cambridge, Massachusetts: Harvard University Press: 1966. Appendix A: Reliability of Chinese Statistics (pp. 215-25). Pinkham, Roger S. “On the Distribution of First Significant Digits.” The Annals of Mathematical Statistics 32, no. 4 (December 1961): 1223-30. Powers, Susan. “Statistical Needs in Eastern Europe,” Monthly Labor Review 115, no. 3 (March 1992): 18-28. Population Census 2010. Zhongguo 2010 nian renkou pucha ziliao (Materials on China’s 2010 Population Census). Three volumes, compiled by the population census office under the State Council and the NBS Department of Population and Employment Statistics. Beijing: Zhongguo tongji chubanshe, 2012. Raimi, Ralph A. “On the Distribution of First Significant Figures.” The American Mathematical Monthly 76, no. 4 (April 1969): 342-8. Raimi, Ralph A. “The First Digit Problem.” The American Mathematical Monthly 83, no. 7 (August-September 1976): 521-38. Rauch, Bernhard, Max Göttsche, and Gernot Brähler. “Fact and Fiction in EU-Governmental Economic Data.” German Economic Review 12, no. 3 (August 2011): 243-55. Rawski, Thomas G. “On the reliability of Chinese economic data: discussion.” Journal of Development Studies 12, no. 4 (1976): 438-41. Rawski, Thomas G. “China by the Numbers: How Reform Has Affected China’s Economic Statistics.” China Perspectives, no. 33 (Jan./Feb. 2001): 25-34. Rawski, Thomas G., and XIAO Wei. “China Economic Review Symposium on Chinese Economic Statistics: Introduction.” China Economic Review 12, no. 4 (2001): 298-302. Schneider, Friedrich, and Dominik H. Enste. “Shadow Economies: Size, Causes, and Consequences.” Journal of Economic Literature 38, no. 1 (March 2000): 77-114. Sinclair, Tara M. “Characteristics and Implications of Chinese Macroeconomic Data Revisions.” Mimeo, Department of Economics and Elliott School for International Affairs, The George Washington University, 21August 2012. Smith, Steven W. “Explaining Benford’s Law.” Chapter 34 in The Scientist and Engineer’s Guide to Digital Signal Processing. Available at http://www.dspguide.com/ch34.htm, last accessed 24 October 2013. (Hardcover publication date: 1997.) Stephens, M.A. “Use of the Kolmogorov-Smirnov, Cramér-Von Mises and Related Statistics without Extensive Tables.” Journal of the Royal Statistical Society 32, Series B (Methodological), no. 1 (1970): 115-22. Thomas, Jacob K. “Unusual Patterns in Reported Earnings.” The Accounting Review 64, no. 4 (October 1989): 773-87. Varian, Hal R. “Benford’s Law” (in section “Letters to the Editor). The American Statistician 26, no. 3 (June 1972): 65f. Weisstein, Eric W. “Benford’s Law.” At http://mathworld.wolfram.com/BenfordsLaw.html, last accessed 14 January 2013. Wu, Harry X. “The Chinese GDP Growth Rate Puzzle: How Fast Has the Chinese Economy Grown?” Asian Economic Papers 6, no. 1 (Winter 2007): 1-23. Xia Xingyuan and Wan Anpei. Zhongguo dixia jingji wenti yanjiu (Study of China’s Underground Economy). Zhengzhou: Henan renmin chubanshe, 1993. XU Xianchun. “Shijie yinhang gaogu zhongguo GDP shuju” (The World Bank overestimates China’s GDP). Zhongguo guoqing guoli, no. 1 (1999a): 7-10. XU Xianchun . “Shijie yinhang dui zhongguo guanfang GDP shuju de tiaozheng he chongxin renke” (The official Chinese GDP figures as adjusted and approved by the World Bank). Jingji yanjiu, no. 6 (June 1999b): 52-8. XU Xianchun. “Zhongguo guonei shengchan zongzhi hesuan zhong cunzai de ruogan wenti yanjiu” (Some problems in the calculation of China’s GDP). Jingji yanjiu, no. 2 (Feb. 2000a): 10-16. XU Xianchun. Zhongguo guonei shengchan zongzhi hesuan (Calculation of China’s GDP). Beijing: Beijing daxue chubanshe, 2000(b). XU Xianchun. “Woguo GDP hesuan yu xianxing SNA de GDP hesuan zhijian de ruogan chayi” (Some discrepancies in China’s GDP compilation in comparison to the current SNA GDP compilation methods). Jingji yanjiu, no. 11 (Nov. 2001): 63-8. XU Xianchun. “Study on Some Problems in Estimating China’s Gross Domestic Product.” Review of Income and Wealth 48, no. 2 (June 2002): 205-15. XU Xianchun . “Guanyu jingji pucha niandu GDP hesuan de bianhua” (Changes in the calculation of annual GDP in the economic census). Jingji yanjiu, no. 2 (February), 2006: 16-20. XU Xianchun. “The Establishment, Reform, and Development of China’s System of National Accounts.” Review of Income and Wealth 55, special issue 1 (July 2009): 442-65. YANG Jisheng. Tombstone: The Great Chinese Famine, 1958-1962. New York: Farrar, Straus and Giroux, 2012. Young, Alwyn. “Gold into Base Metals: Productivity Growth in the People’s Republic of China During the Reform Period.” NBER Working Paper Series 7856, August 2000. ZHANG Sai. “Guanyu ‘Zhonghua renmin gongheguo tongjifa xiuzhengan (zao’an)’ de shuoming” (Explanation of the (draft) scheduled revisions to the PRC Statistics Law). 23 August 1995. In China Infobank. ZHANG Zhichao, DING Hong, and DAN Fangfang. “Zhongguo dixia jingji de guimo guce” (An estimate of the size of China’s underground economy). Lilun xintan, no. 12 (2004): 22f. ZHAO Peng. “Nongcun jingji tongji bu shi de yuanyin ji duice” (Reasons why rural statistics are false and counter-policies). Nongcun Hezuo Jingji Jingying Guanli, no. 6 (1998): 42f. |
URI: | https://mpra.ub.uni-muenchen.de/id/eprint/51864 |