Is China Fudging its Figures? Evidence from Trading Partner Data

36 Pages Posted: 5 Nov 2015

See all articles by John G. Fernald

John G. Fernald

Federal Reserve Bank of San Francisco

Eric Hsu

University of California, Berkeley

Mark M. Spiegel

Federal Reserve Bank of San Francisco - Economic Research Department

Date Written: 2015

Abstract

How reliable are China’s GDP and other data? We address this question by using trading partner exports to China as an independent measure of its economic activity from 2000–2014. We find that the information content of Chinese GDP improves markedly after 2008.We also consider a number of plausible, non-GDP indicators of economic activity that have been identified as alternative Chinese output measures. We find that activity factors based on the first principal component of sets of indicators are substantially more informative than GDP alone. The index that best matches activity in-sample uses four indicators: electricity, rail freight, an index of raw materials supply, and retail sales. Adding GDP to this group only modestly improves in-sample performance. Moreover, out of sample, a single activity factor without GDP proves the most reliable measure of economic activity.

Keywords: C53, C82, E20, F17, China, GDP, principal components, structural break, forecasting

Suggested Citation

Fernald, John G. and Hsu, Eric and Spiegel, Mark M., Is China Fudging its Figures? Evidence from Trading Partner Data (2015). BOFIT Discussion Paper No. 29/2015. Available at SSRN: https://ssrn.com/abstract=2686551

John G. Fernald (Contact Author)

Federal Reserve Bank of San Francisco ( email )

101 Market Street
San Francisco, CA 94105
United States
415-974-2135 (Phone)

HOME PAGE: http://www.frbsf.org/economics/economists/jfernald.html

Eric Hsu

University of California, Berkeley ( email )

Department of Economics
Evans Hall, #3880
Berkeley, CA 94720
United States

Mark M. Spiegel

Federal Reserve Bank of San Francisco - Economic Research Department ( email )

101 Market Street
San Francisco, CA 94105
United States
415-974-3184 (Phone)
415-974-2168 (Fax)

HOME PAGE: http://www.frbsf.org/economics/economists/mspiegel.html

Register to save articles to
your library

Register

Paper statistics

Downloads
54
rank
368,849
Abstract Views
524
PlumX Metrics
!

Under construction: SSRN citations will be offline until July when we will launch a brand new and improved citations service, check here for more details.

For more information