Whether one feels positive or negative about China’s economic prospects, everyone can agree that its indicators are a mess. But the fact that the data are flawed does not mean that they are deliberately manipulated to yield a particular outcome.
These distortions affect two key policy concerns that dominate public attention. One has to do with purportedly overstated gross domestic product growth rates. The other involves perceptions about China’s unbalanced growth as reflected in its extremely low consumption share of GDP and high investment share.
Many China watchers believe that officials have deliberately overstated economic growth figures to meet plan targets, citing for example that the sum of provincial growth rates exceeds the reported national rate. Local officials probably do exaggerate but other factors such as double-counting of cross-provincial activities and differing methodologies play a larger role which the centre then reconciles through separate surveys.