Coming soon: a new tool to grapple with Chinese economic data
- Beijing’s figures have long confounded investors, businesses and governments, which assume official data is more politically than statistically driven
- Blending databases and interviews with China experts, the Centre for Strategic and International Studies has created a gauge it hopes provides a more accurate picture
A Washington think tank outlined a new tool Wednesday to address a problem that has plagued economists for decades: how to make sense of data from China often suspected of being more politically driven than statistically based.
Finding accurate information on the world’s second-largest economy is hugely important for Western investors, companies and governments trying to map out their own futures. For years, economists have tried to use proxies including the amount of electricity employed or the number of loaded trucks leaving factories to get a more accurate picture.
“Depending on Chinese official data is not the wisest thing to do if you really want to understand the true trajectory of China’s economy,” Scott Kennedy, chair of Chinese economics at the Centre for Strategic and International Studies, said.
“This is something that folks in Washington and other capitals have worried about a lot for a very, very long time. And particularly, as China’s economy at least reportedly officially gets bigger and bigger – and potentially approaches and may surpass the size of the US – this is of increasing interest.”
So Kennedy has developed a new tool, the result of a database of a wide range of other metrics and interviews with 15 leading economists who track China’s gross domestic product. Kennedy, who is travelling in Asia this week, said he expected to release the live version as soon as next week.