IDEAS home Printed from https://ideas.repec.org/a/eee/chieco/v71y2022ics1043951x21001279.html
   My bibliography  Save this article

Deflating China's nominal GDP: 2004–2018

Author

Listed:
  • Lai, Pingyao
  • Zhu, Tian

Abstract

This paper is a preliminary attempt to use both the value added approach with double deflation and the expenditure approach to deflate China's nominal GDP over 15 years (2004–2018). The results show that China's real GDP growth during the period has significantly more fluctuations than the official statistics indicate. Additionally, inflation, as measured by the official implicit GDP deflator, is generally overestimated during boom years but underestimated during downturn years. In particular, it is shown that China's growth slowdown in recent years before the COVID-19 pandemic may have been more severe than official figures suggest.

Suggested Citation

  • Lai, Pingyao & Zhu, Tian, 2022. "Deflating China's nominal GDP: 2004–2018," China Economic Review, Elsevier, vol. 71(C).
    • Handle: RePEc:eee:chieco:v:71:y:2022:i:c:s1043951x21001279
    DOI: 10.1016/j.chieco.2021.101709
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1043951X21001279
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.chieco.2021.101709?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Fernald, John G. & Hsu, Eric & Spiegel, Mark M., 2021. "Is China fudging its GDP figures? Evidence from trading partner data," Journal of International Money and Finance, Elsevier, vol. 110(C).
    2. Yingyao Hu & Jiaxiong Yao, 2019. "Illuminating Economic Growth," IMF Working Papers 2019/077, International Monetary Fund.
    3. Robert C. Feenstra & Robert Inklaar & Marcel P. Timmer, 2015. "The Next Generation of the Penn World Table," American Economic Review, American Economic Association, vol. 105(10), pages 3150-3182, October.
    4. Emi Nakamura & Jón Steinsson & Miao Liu, 2016. "Are Chinese Growth and Inflation Too Smooth? Evidence from Engel Curves," American Economic Journal: Macroeconomics, American Economic Association, vol. 8(3), pages 113-144, July.
    5. repec:bla:revinw:v:46:y:2000:i:4:p:475-99 is not listed on IDEAS
    6. Zhu,Tian, 2021. "Catching Up to America," Cambridge Books, Cambridge University Press, number 9781316510612, November.
    7. Thomas F Alexander & Claudia H Dziobek & Marco Marini & Eric Metreau & Michael Stanger, 2017. "Measure up; A Better Way to Calculate GDP," IMF Staff Discussion Notes 17/02, International Monetary Fund.
    8. Harry X. Wu, 2000. "China'S Gdp Level And Growth Performance: Alternative Estimates And The Implications," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 46(4), pages 475-499, December.
    9. Eeva Kerola, 2019. "In Search of Fluctuations: Another Look at China’s Incredibly Stable GDP Growth Rates," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 61(3), pages 359-380, September.
    10. Nicholas Oulton & Ana Rincon-Aznar & Lea Samek & Sylaja Srinivasan, 2018. "Double Deflation: theory and practice," Discussion Papers 1831, Centre for Macroeconomics (CFM).
    11. Sato, Kazuo, 1976. "The Meaning and Measurement of the Real Value Added Index," The Review of Economics and Statistics, MIT Press, vol. 58(4), pages 434-442, November.
    12. Xianchun Xu, 2009. "The Establishment, Reform, And Development Of China'S System Of National Accounts," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 55(s1), pages 442-465, July.
    13. Sims, Christopher A, 1969. "Theoretical Basis for a Double Deflated Index of Real Value Added," The Review of Economics and Statistics, MIT Press, vol. 51(4), pages 470-471, November.
    14. Fernald, John G. & Hsu, Eric & Spiegel, Mark M., 2021. "Reprint: Is China fudging its GDP figures? Evidence from trading partner data," Journal of International Money and Finance, Elsevier, vol. 114(C).
    15. Harry X. Wu, 2007. "The Chinese GDP Growth Rate Puzzle: How Fast Has the Chinese Economy Grown?," Asian Economic Papers, MIT Press, vol. 6(1), pages 1-23, Winter.
    16. Fang Liu & Jun Zhang & Tian Zhu, 2016. "How much can we trust China’s investment statistics?," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 14(3), pages 215-228, July.
    17. Shirley Cassing, 1996. "Correctly Measuring Real Value Added," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 42(2), pages 195-206, June.
    18. Harry X. Wu, 2002. "How Fast Has Chinese Industry Grown?—Measuring The Real Output Of Chinese Industry, 1949–97," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 48(2), pages 179-204, June.
    19. Rawski, Thomas G., 2001. "What is happening to China's GDP statistics?," China Economic Review, Elsevier, vol. 12(4), pages 347-354.
    20. Alwyn Young, 2003. "Gold into Base Metals: Productivity Growth in the People's Republic of China during the Reform Period," Journal of Political Economy, University of Chicago Press, vol. 111(6), pages 1220-1261, December.
    21. Mr. Thomas F Alexander & Ms. Claudia H Dziobek & Mr. Marco Marini & Eric Metreau & Mr. Michael Stanger, 2017. "Measure up: A Better Way to Calculate GDP," IMF Staff Discussion Notes 2017/002, International Monetary Fund.
    22. Braithwait, Steven D, 1980. "The Substitution Bias of the Laspeyres Price Index: An Analysis Using Estimated Cost-of-Living Indexes," American Economic Review, American Economic Association, vol. 70(1), pages 64-77, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Sinclair, Tara M., 2019. "Characteristics and implications of Chinese macroeconomic data revisions," International Journal of Forecasting, Elsevier, vol. 35(3), pages 1108-1117.
    2. Holz, Carsten A., 2014. "The quality of China's GDP statistics," China Economic Review, Elsevier, vol. 30(C), pages 309-338.
    3. Wang, Xi & Liu, Ying & Chen, Zhongfei, 2022. "Monetary policy dysregulation with data distortion," Economic Modelling, Elsevier, vol. 116(C).
    4. Eeva Kerola, 2019. "In Search of Fluctuations: Another Look at China’s Incredibly Stable GDP Growth Rates," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 61(3), pages 359-380, September.
    5. Lee, Boon L. & Rao, D.S. Prasada & Shepherd, William, 2007. "Comparisons of real output and productivity of Chinese and Indian manufacturing, 1980-2002," Journal of Development Economics, Elsevier, vol. 84(1), pages 378-416, September.
    6. Li, Kui-Wai & Liu, Tung, 2011. "Economic and productivity growth decomposition: An application to post-reform China," Economic Modelling, Elsevier, vol. 28(1-2), pages 366-373, January.
    7. Thomas Piketty & Li Yang & Gabriel Zucman, 2019. "Capital Accumulation, Private Property, and Rising Inequality in China, 1978–2015," American Economic Review, American Economic Association, vol. 109(7), pages 2469-2496, July.
    8. Cook, Jonathan Aaron, 2013. "Does Chinese Inflation Understate Cost of Living?," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150571, Agricultural and Applied Economics Association.
    9. Thomas Piketty & Li Yang & Gabriel Zucman, 2017. "Appendix to "Capital Accumulation, Private Property and Rising Inequality in China, 1978-2015"," Working Papers 201707, World Inequality Lab.
    10. William Barcelona & Danilo Cascaldi-Garcia & Jasper Hoek & Eva Van Leemput, 2022. "What Happens in China Does Not Stay in China," International Finance Discussion Papers 1360, Board of Governors of the Federal Reserve System (U.S.).
    11. Zhang, Ping & Shi, XunPeng & Sun, YongPing & Cui, Jingbo & Shao, Shuai, 2019. "Have China's provinces achieved their targets of energy intensity reduction? Reassessment based on nighttime lighting data," Energy Policy, Elsevier, vol. 128(C), pages 276-283.
    12. Harry X. Wu & Eric Girardin, 2016. "The ‘new’ normal is ‘old’ in China: Very late catching up and return to the (pre-WTO) old normal," EcoMod2016 9721, EcoMod.
    13. Zhou, Yixiao & Tyers, Rod, 2019. "Automation and inequality in China," China Economic Review, Elsevier, vol. 58(C).
    14. Chen, Kaiji & Higgins, Patrick & Zha, Tao, 2024. "Constructing quarterly Chinese time series usable for macroeconomic analysis," Journal of International Money and Finance, Elsevier, vol. 143(C).
    15. Angus Deaton, 2005. "Measuring Poverty in a Growing World (or Measuring Growth in a Poor World)," The Review of Economics and Statistics, MIT Press, vol. 87(1), pages 1-19, February.
    16. Wu, Harry X., 2011. "The Real Growth of Chinese Industry Debate Revisited--Reconstructing China's Industrial GDP in 1949-2008--," Economic Review, Hitotsubashi University, vol. 62(3), pages 209-224, July.
    17. Clark, Hunter & Pinkovskiy, Maxim & Sala-i-Martin, Xavier, 2020. "China's GDP growth may be understated," China Economic Review, Elsevier, vol. 62(C).
    18. Kerola, Eeva, 2018. "In search of fluctuations : Another look at China’s incredibly stable GDP growth," BOFIT Discussion Papers 23/2018, Bank of Finland, Institute for Economies in Transition.
    19. Leandro Prados de la Escosura, 2014. "Mismeasuring Long Run Growth. The Bias from Spliced National Accounts," Working Papers 0060, European Historical Economics Society (EHES).
    20. John Knight & Sai Ding, 2008. "Why has China Grown so Fast? The Role of Structural Change," Economics Series Working Papers 415, University of Oxford, Department of Economics.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:chieco:v:71:y:2022:i:c:s1043951x21001279. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/chieco .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.