Is China’s GDP really only 6 percent?

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China’s booming economic growth may not be all it seems. In Sunday’s New York Times, Lester Thurow argues China’s official economic statistics are not to be believed and there is simply no way its economy will catch the United States before the end of the century.

Thurow, a professor of management and economics at the Massachusetts Institute of Technology, questions China’s official Chinese growth statistics, calling them implausible and at best, an approximate growth rates of the economy of China cities.

First, let’s deal with the implausibility of the official Chinese statistics. Mathematically, if the overall economy were to grow 10 percent annually, and the 70 percent of the economy that is based in rural areas were not growing (as stated by the Chinese government), the economy in China’s cities would have to be growing by 33 percent a year. The urban economy is growing rapidly, but not at a 33 percent pace.

Thurow uses electrical consumption to gage China’s actual growth.

Economic growth rates can be inferred from electricity consumption. In every country in the world, electricity use has generally grown faster than the G.D.P. Electricity is necessary for nearly all productive activities, and because of inefficiencies, consumption of electricity has generally outstripped economic growth. Rising energy costs have resulted in more efficient use of electricity, but especially in the developing world, economic growth has still generally lagged growth in electricity.

But if China’s official numbers are to be believed, there are provinces in China where the G.D.P. has been growing faster than energy use. That is unlikely, since the central government’s statistics also say that energy use per unit of G.D.P. is going up — not down, as claimed in provincial G.D.P. statistics.

China’s official statistics have had a long history of improbability and when you consider that the central government’s figures are rarely in sync with provincial data, Thurow’s calculations are not surprising. During China’s second five year plan, official food production statistics had no relation to reality and the Great Leap Forward became anything but. The hyping of numbers is not a unique Chinese problem of course – think Vietnam War body counts – and if one is to go by Thurow’s numbers, rather than official statistics, it would appear that Beijing pronouncements of a Chinese century are about a hundred years off.

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