The government’s attempts to stamp out any outbreak of covid-19 has bruised the economy, crippling manufacturing intermittently, and consumption more persistently
Save time by listening to our audio articles as you multitaskThis has put China’s rulers in a pickle. They seem determined to stick to their zero-covid policy. And they would no doubt love to cling to their officialgrowth target of “around 5.5%”. But it has become clear they cannot do both. Unless, of course, they fiddle the growth figures.
That is not beyond them. But there is so far little sign of it. The most recent data showed that the economy grew by only 0.4% in the second quarter, compared with a year earlier. This was not only bad, but worse than expected by private forecasters. In a large teleconference in May, Li Keqiang, China’s prime minister, urged local officials to do more for the economy. But he also cautioned them to seek truth from facts, abiding by statistical regulations.
When he was himself a local official in the north-eastern province of Liaoning, Mr Li sought the truth about the provincial economy from three facts in particular: the electricity it consumed, the cargo travelling on its railways and the amount of loans disbursed by its banks. These indicators, he felt, were more reliable than the officialfigures.
The chart shows our attempt to do that, using much the same method as Mr Fernald and his co-authors. Our calculation is not designed to show if China has systematically overstatedgrowth over the past two decades. But it can detect if reported growth is nearer its underlying trend than it should be, given how far the other seven indicators have strayed from their own usual trajectories. The awful data on retail sales and construction in the second quarter were, for example, far outside the norm.
In all, these indicators suggest the official growth measure was honest. Our approach cannot reveal every kind of statistical skulduggery, but it does suggest China made no extra effort to fudge the figures in the second quarter, despite the unusual ugliness of the time. China’s rulers want to fight the downturn, the virus and doubts about their country’s data. They are doing a better job on the last two counts than on the first.
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