Data Manipulation of Inflation Statistics Artificially Raises Real GDP: The Case of China

Christopher Balding

Published: June 2014

Baseline Chinese economic data are unreliable. Taking published National Bureau of Statistics China data, three problems appear. First, base data on housing price inflation are manipulated. Second, the NBSC misclassifies most Chinese households as private housing occupants. Third, the NSBC applies a straight 80/20 urban/rural private housing weighting. To correct for these manipulative practices, I use third party and related NBSC data to correct the change in consumer prices in China between 2000 and 2011. I find that using conservative assumptions about price increases, the annual CPI in China should be adjusted upwards by approximately 1%. This reduces real Chinese GDP by 8–12% or more than $1 trillion in PPP terms.