That isn't to say China's GDP hasn't been growing, just that the numbers are always being fudged one way or the other. They used to even fudge the numbers down (growth higher than reported) to prevent the appearance of overheating.
It is ironic that Li Keqiang is premiere (#2) but Xi Jinping has decided not to use his index (https://en.wikipedia.org/wiki/Li_Keqiang_index) that gets around fudging with more accurate statistics.
Li Keqiang Index has three components, electricity consumption, railway cargo volume and bank loans. They all had pretty good growth, e.g.
People need to be realistic, China's current GDP per capita is lower than world's average, it is an extremely poor country totally under developed. With the largest domestic market and hard working population, how hard will it be to grow at 6-7% to catch up with some in the middle of nowhere countries with $20k USD GDP per capita?
For example the Yangtze River Delta has more than 100m people (more than any European country) and GPD(PPP) per capita similar to Italy: https://en.wikipedia.org/wiki/Yangtze_River_Delta
Hong Kong is a developed country.
It has a public housing system, a public healthcare system, and amazing transport.
It has massive issues with income equality, and particular poverty in old age.
However, it doesn't belong in a comparison beside cities in China.
These are the sign of a developed country?
"The Human Development Index (HDI) is a statistic composite index of life expectancy, education, and per capita income indicators, which are used to rank countries into four tiers of human development. A country scores a higher HDI when the lifespan is higher, the education level is higher, and the GNI (PPP) per capita is higher. It was developed by Pakistani economist Mahbub ul Haq, with help from Gustav Ranis of Yale University and Lord Meghnad Desai of the London School of Economics, and was further used to measure a country's development by the United Nations Development Program (UNDP)'s Human Development Report Office"
According to Wikipedia China has a HDI of 0.752 which is considered high, 86th position on the list of countries. Hong Kong also has high HDI, 0.933, very high, 7th position.
This comparison is much better than trying to come up with an arbitrary measure.
I also readily say "Hong Kong is not China".
Although, as time goes on, the truth of that statement is eroded.
I won't make such comment by completely ignoring the wellbeings of other hundreds million people who live just a couple hours drive from the so called Yangtze River Delta. To name a few examples -
Anhui province is so poor to the extent that it is offensive to ask people questions like "so you came from Anhui?" in Shanghai.
Henan province has 100 million population on its own, it is nothing really different from the least developed part of Africa.
Those are real people & real lives. How the other 100 million slightly better off Chinese living in Shanghai or Beijing doesn't change the absolute poverty suffered by those hundreds millions not living in tier-1 or tier-2 Chinese cities. Anything painting China as a rich/developed/modern/high tech country is nothing else but cheap propaganda.
Let's make it crystal clear - China's GDP per capita is below the world average. The OP article further pointed out that such reported GDP figures might be inflated as well. When the GDP per capita is below world average, how it is not a poor country significantly under developed?? The only real risk China can possibly pose to the world/west is the fact that a collapsed China can trouble the whole world/west.
When China is damn poor, it is thus much easier to develop and grow 6-7% each year. It is like cutting 1s is easy when it takes you 20-25s to run 100 meters, but it is close to impossible to do the same when you are already finishing 100 meters in 11s. China's GDP is growing 6-7% not because it is smart/modern/strong, it is the complete opposite, it is because China's GDP per capita is well below world's average!
People hear "China is a developing country" and think it's comparable to countries like Bangladesh or Cambodia. But the tier-1 cities and their peripheries are not some tiny enclaves of wealth like Singapore, they are huge - bigger than major European countries.
The fact that poor/undeveloped areas are relatively nearby does not make them less developed than the fact that Moldova and Kosovo are in the EU's backyard make Germany undeveloped.
those are two vastly different independent countries.
> how developed it is
can we just cut all cheap talks and focus on undisputed facts and numbers? the undisputed facts here is extremely simple -
1. China's official GDP per capita is well below world's average.
2. The research in the OP article shows such official figure is highly inflated.
You can keep painting China as "developed" or "developed in some selected areas", the above undisputed facts won't change. Hundreds of millions of Chinese live well below the world average standard when it comes to their economic lives. Selectively ignoring the real life situation of hundreds of millions just to back what you believe is not that convincing.
Perhaps cause it is not possible that every person in the world would be living above world average? Especially in the country that is home to almost 1/6 of total world population.
In many countries there are huge regional differences but I hope that after 30 years of growth even people living in poor provinces of China are better off. Even if the statistics are trumped up for propaganda reasons.
> how hard will it be to grow at 6-7% to catch up with some in the middle of nowhere countries with $20k USD GDP per capita?
It seems people are now downvoting comments they don't like. You may not like the above comment, but it is hard to argue against it as they are facts. This to me, is a much bigger problem on HN right now. The quality of discussion ( especially anything to do with China ) is dropping.
This isn't new. It's been part of HN since the beginning. pg said this a decade ago.
>I think it's ok to use the up and down arrows to express agreement. Obviously the uparrows aren't only for applauding politeness, so it seems reasonable that the downarrows aren't only for booing rudeness.
Maybe he or the current mods have changed their minds since then or maybe they haven't, but it's been part of the culture here from the start.
>You may not like the above comment, but it is hard to argue against it as they are facts.
I didn't personally downvote it, but I don't think people who did are necessarily arguing with facts. Parts of the comment were facts, and parts were conjecture. Downvoting the comment because you disagree with the conjecture seems reasonable to me.
It may be that if you personally upvote strong comments, you aren't doing anything interesting because you're promoting an already strong predictor, something which the community has no trouble detecting.
I have learned this the hard way by being flagged on China related topics. We aren't here for a flame-war or to even mention the word 'downvoted'.
I am personally of the opinion that China are way ahead of us and that there is a tide of lazy views relating to our hard working, highly educated Chinese friends. Fun fact: the Iron Age came to China 2000 years before we think the Iron Age happened.
Hence my suggestion. Rather than take the bait or think you can make a reasoned comment in response to something ignorant, use the 'flag' button. If it breaks the house rules, flag it and it goes. In this way we can hopefully improve discourse regarding anything China related.
This doesn't mean I am pro China in anything. Just stating some alternative views. I just wish they open up their market and level up the playing field for foreign companies.
Now, how these no joke international institutes miss a double digit overaccounting for over a decade?
I'm assuming that's what happened since this article very quickly moved from 1st place to below other articles that are older and have far fewer comments and upvotes.
Edit: currently #21 despite more upvotes and comments and being newer than the top 3 articles.
If you look at the comments in the thread that have been flag killed, they are mostly low quality comments on both sides of the
And looking at downvoted comments, there doesn't seem to be much correlation at all between upvotes and whether the comment is critical of China.
Please have a look at the other reply I made in this thread, when someone mentioned that Li Keqiang Index and argued that it is a better indicator of China's real GDP growth, I listed recent figures to show that if Li Keqiang Index is actually more reliable, there would be higher real GDP growth. My cited numbers are from Caixin, which is considered as a pretty reliable private source.
What happened to my reply? My "low quality" comment is downvoted within seconds. I don't think China bashing comments are being treated the same way.
Rather than just blindly marking other people's replies as of "low quality", maybe you can share some more details on why my downvoted reply above is of low quality and how can I improve from that.
Oh, btw, with high confidence that this reply is going to be downvoted fast.
I generally don't downvote something unless they are, meaningless, offer no value to discussions or spreading wrong information that could easily be disproved.
And since I know it wasn't when I made my comment, I wasn't talking about your comment. Downvoting is different from flagging.
Enable viewing dead comments, scroll to the bottom, and tell me they aren't low quality.
Also 2/3 of the dead comments I see right now are anti-China comments.
I believe Chinese central planners don't like misleading numbers, it makes the five year plan much harder to design. The Chinese technocrats wouldn't like this situation any more than western investment does.
Vietnam, Russia, Tibet and other neighbors can attest that that one is not like the other.
> The disputes involve both maritime boundaries and islands. There are several disputes, each of which involves a different collection of countries:
> The nine-dash line area claimed by the Republic of China, later the People's Republic of China (PRC), which covers most of the South China Sea and overlaps the exclusive economic zone claims of Brunei, Indonesia, Malaysia, the Philippines, Taiwan, and Vietnam.
Maritime boundary along the Vietnamese coast between the PRC, Taiwan, and Vietnam.
Maritime boundary north of Borneo between the PRC, Malaysia, Brunei, Philippines, and Taiwan.
Islands, reefs, banks and shoals in the South China Sea, including the Paracel Islands, the Pratas Islands, Macclesfield Bank, Scarborough Shoal and the Spratly Islands between the PRC, Taiwan, and Vietnam, and parts of the area also contested by Malaysia and the Philippines.
Maritime boundary in the waters north of the Natuna Islands between the PRC, Indonesia and Taiwan
Maritime boundary off the coast of Palawan and Luzon between the PRC, the Philippines, and Taiwan.
Maritime boundary, land territory, and the islands of Sabah, including Ambalat, between Indonesia, Malaysia, and the Philippines.
Maritime boundary and islands in the Luzon Strait between the PRC, the Philippines, and Taiwan.
They had a habit of killing local technocrats who didn't report strong numbers, though, so I can understand why someone would say their starving town had a grain surplus. And of course the guy doing the killing is under a similar threat, all the way to the top.
And yes, India's GDP is probably higher because of the gigantic informal economy. People are richer than their tax documents make them seem.
Nobody, including Beijing, took China’s official statistics at face value. What’s novel in this work is the larger-than-expected magnitude of the error.
Best I recollect from back when I was reading Pettis' blog on a regular basis, that figure is actually lower than what he was been suggesting China had been overstating its growth by in the decade prior to 2008.
Pettis is about as specialized in China financial markets as you can get, having basically studied and blogging about the stuff exclusively insofar as I'm aware while living and teaching finance there. He has many criticisms of how China is reporting numbers. One in particular is that local officials are expected to meet certain GDP targets. When the numbers don't look like they'll be in, they'll take on debt and build a bridge to nowhere to make their numbers.
The point being, from where I'm standing from there doesn't seem to be anything new in the magnitude of the error. (It's great if the article made you privy about how overstated the economy was.)
That the bubble will pop isn't very interesting. When, is.
That said, I no longer trust the mass media to report something like this accurately either. For all we know someone might be throwing in a narrative to help (or hurt) the ongoing trade negotiations.
> Companies with annual revenue below 360k RMB (roughly 53k USD) are exempt from VAT tax and all subsequent taxes. China has more than 65 million (2017 estimate) such micro companies, often single person, or single family (two people). If you multiply the two numbers together, it is up to 3.4 trillion USD per year. Just assuming only 1/4 to 1/2 is achieved, that is a 0.85 to 1.70 trillion USD economy, roughly 7% to 14% of overall Chinese GDP will have to be estimated, and can be potentially massively under reporting.
source: https://www.reddit.com/r/Economics/comments/aycs6x/chinas_20... - I will probably look this up in the future but can't verify this comment right now.
Here's a paper from the National Bureau of Economics Research that suggests that Chinese GDP might be understated: https://www.nber.org/papers/w23323 - this paper analyzes Chinese GDP by looking at its nighttime light usage. In this vein, I've heard that government actually tries to be conservative with the numbers so as to avoid the overstatement claims, but I have 0 sources on this.
For the Brookings paper linked in the post, one big issue with it is that it didn't account for a tax-related change that happened in 2008-09. See this reddit comment for details: https://www.reddit.com/r/Economics/comments/aycs6x/chinas_20... - this means that the overstatement is still there, but probably smaller. The author of that reddit comment emailed the authors but hasn't heard back.
It does seem like everyone will take the "OMG CHINA FAKES EVERYTHING" at face value as it confirms their biases. I don't want to speak on either side of it, growing up in China we/my parents/friends all make fun of the GDP numbers and call them chicken butt (鸡的屁 sounds like GDP). Maybe the core of the issue is that no one really has transparency so it's really hard to tell for sure, so no one, domestic or foreign, trusts the numbers given by the government. If so, maybe the objective ways of doing analysis, like satellite footage on night time lights, is the way to go (not to say the article I linked is thus 100% the truth). Anyone have other ideas on what indicators, like nighttime lights, can be used here?
I don't know why some people are so emotional about China. Sounds like they have lost something in their lifes.
An adult conversation is a fact driven conversation. That is the basic culture for HN v.s. places like reddit.
GDP is a manipulable number that has lost its accurate meaning. Even the ratings of the TVs have multi-aspects now.
It has been no secret that any numbers from china needs to taken with a grain salt.
It's not a matter of "oh wow, a major government fudges numbers", it's "how many major ways in which my government fudges numbers might I not be aware of?"
I’m searching and can’t find one. I also remember reading Fannie & Freddie prospectuses from that time. Each contained extensive financial disclosures.
Could Fannie’s officers really have been accurately
disclosing the risks the firm was taking shortly before
its sudden collapse? It is here where the case got complicated.
While he was chief executive, Mr. Mudd said that subprime
mortgages accounted for about 2 percent or less of the
mortgages Fannie Mae was insuring. The commission’s case
largely rested on the fact that this percentage did not
include the insurer’s longstanding programs for low-credit
score borrowers, Expanded Approval and MyCommunityMortgage.
The theory about the Alt-A loan disclosures was also not
that Fannie had not disclosed that it was in the business.
It classified a number of its loans as Alt-A, and told
investors as much. But it did not disclose that it had
instructed lenders not to classify certain other loans as
Alt-A, even though they were also supported by low
Then, once it became clear that there was a lot more risk than they had thought, the goal of the fudging became preventing the markets from finding out about the risk, to keep prices high and avoid financial loss.
There were congressional hearings in 2005 because the GSEs couldn't produce financials.
It’s not the size of the lie, it’s the degree to which you can leverage it. For policy makers, the best practice is to use plausibly deniable, small, but highly leveraged lies.
Source? I worked in that industry at that time & there was lots of odd things going on, there was never a whiff of non-reporting on their part that I remember.
All of these numbers are watched to extreme degrees by market participants. The idea that they are constantly redefined doesn’t hold up to basic analysis by anyone who has traded on that data.
But as can be seen from my comment being brutally down voted, the force of jingoism is very strong.