Is China's economic growth rate so high over the years?

[New Sancai Compilation and First Release] China’s annual economic growth rate over the past few decades has been very high. From 1994 to 2018, its GDP grew by an average of nearly 9% per year, which is too good to be envied by many countries. The eyes of many economists could not be opened any longer. Its development model has allowed hundreds of millions of people to rush from the countryside to factories, building buildings have been erected everywhere, expressways and high-speed rails have spread across the country like spider webs, and the number of cars has exploded every year.

But many economists have doubts about the high GDP growth rate announced by the Chinese authorities. Looking at the data released by the Chinese government, regardless of whether other major economies in the world are in prosperity or recession, the Chinese economy has been steadily growing at a high single-digit growth rate year after year.

Why do some people worry about whether China's economic growth rate is real or overstated? Wouldn't it be great to be able to buy various home appliances, 3C items, various living utensils and vehicles at the lowest price? This is true, of course, but the size of China's economy and its growth rate may have some impact on the whole world, and may even have some political effects.

China has always made no secret of its ambition to replace the United States as the superpower in the global political and economic order, and it also knows that it must have the world's largest economy to achieve this goal. Therefore, the CCP has the guts to portray a bright side in statistical reports, to convince the world that China is continuing to surpass the United States.

Because the economic data released by the Chinese government over the years are too good, some economists try to conduct an anatomical test on China's economic data to confirm whether the National Bureau of Statistics of China has falsely reported China's GDP growth rate. For example, economists at the University of Chicago in the United States conducted an in-depth examination of the data released by various departments in China during the decade before 2018. They concluded that before 2018, China misreported its real growth rate by an average of two percent per year. It may sound like a small amount, but the compounding effect is substantial. If this data is true, then in the ten years before 2018, the total real growth rate of the Chinese economy will be nearly 20% lower than the published data.

According to US news media reports, China's GDP in 2018 was more than US$12.8 trillion. If 20% is deducted, this statistic will only be more than US$10 trillion. Compared with the GDP of the United States, there is a huge gap. According to the report of the US Bureau of Economic Analysis, the GDP of the United States in 2018 was 20.5 trillion US dollars, which is about twice that of China's GDP.

If there is such a huge gap between the US and China, it casts doubt on China's ability to overtake the US any time soon, and exposes the CCP's manipulation of statistics, which is already showing real signs of a recession in China.

The research results of these economists in the United States have a high degree of authenticity, because they use data that cannot be falsified, such as power generation, rail freight volume, cargo export volume, and the intensity of ground light at night observed by satellites. Base. The final research results confirmed their suspicions. The calculation results of China's real economic growth rate over the years are almost all lower than the results announced by the CCP Statistics Bureau. This kind of false reporting of data is very common in China's totalitarian system, because the CCP believes that only by convincing the people that the CCP has provided good economic well-being for the people can it maintain the legitimacy and stability of its rule.

If the Chinese people find that their economy has materially declined, the rationale for the CCP to retain power and criminalize the protesters will be questioned by the people. Therefore, the CCP has all the more reason to shape China's economy into a prosperous scene. Some authoritative organizations such as the US Federal Reserve are also seeking evidence to determine whether the CCP is misreporting economic data to enhance its international image.

The US Federal Reserve pointed out that changes in total energy consumption can measure the level of economic activity in a country. The Fed therefore questioned the veracity of China's GDP statistics, as the Chinese government reported that the economy maintained positive growth even during a period when energy consumption fell sharply. For example, between 1997 and 2001, the Chinese government said that GDP grew by about 25 percent, but economists pointed out that China's energy consumption actually fell by 30 percent during that five-year period. This indicates that China's economy was severely contracted during that time, but the Chinese government denies this fact.

Those who completely believe in the CCP and ignore the facts presented by the data may refute and comfort themselves with various reasons and data, thinking that the economic data and growth rates released by the CCP in the past few decades may only be a little statistical error That's it, no big deal.

Of course, the believer is a constant believer, this is a human choice. But if you are a realistic investor, it may be necessary to be cautious and verify any statements and data issued by the Chinese government. After all, statistical data is easy to falsify, and the media often cannot verify or have no time to verify, so they just publish all the data and statements issued by the Chinese government.

(Compilation: Mulian)

(Editor in charge: Jiang Qiming)

(Source of the article: New Sancai first release)