Fake Growth? China “Adjusts” 2018 GDP 2.1% Higher Due To Census

In 2016, China admitted its economic data was fake, pointing out that “some local statistics are falsified, and fraud and deception happen from time to time.”

In 2017, China (again) admitted its economic data was fake, saying that a nationwide audit found some local governments inflated revenue levels and raised debt illegally, with some local GDP data as much as 20% “over-cooked.”

In 2018, we exposed China’s “cooked” numbers in China’s industrial profits growth data.

And early in 2019, a team of researchers from the Brookings Institute published a carefully researched paper detailing the exact mechanism by which authorities in Beijing inflate the country’s GDP figures, while estimating that China’s economy is roughly 12% smaller than the official figures would suggest.

And so here we are, nearing the end of 2019 and China’s economic growth is lagging badly – at or near the lowest since record began over 30 years ago (and expected to grow at less than 6.0% next year for the first time) – we get new from China’s National Nureau of Statistics that 2018’s GDP data is to be adjusted…

Can you guess which way the adjustment went?

Based on China’s gross domestic product (GDP) accounting system and the results of the fourth national economic census, the National Bureau of Statistics revised the preliminary accounting figures for 2018. The main results are as follows:

In 2018, the gross domestic product was 91.93 trillion yuan, an increase of 1.8972 trillion yuan over the initial accounting, an increase of 2.1%.

The revisions were almost entirely focused in the tertiary sector of the economy, whose growth was “adjusted” 4.29% higher while the primary sector barely moved and the output of the secondary sector was actually adjusted 0.32% lower.

We look forward to 2019’s goal-seeked adjustments… to ensure China’s growth remains above the ‘mandated’ 6%.