China’s economy is estimated to be higher by 4% based on the data obtained by Chinese newspaper, The Economic Information Daily from its 28 provincial government statistics offices.

China shadow banking

China’s GDP

The newspaper calculated that the total gross domestic product (GDP) of the provinces year-to-date is 42.4 trillion yuan meaning the economy of China is significantly bigger than what the central government estimated at 3.7 trillion yuan. However, many believe that data from the local governments in the country are questionable.

In 2007, China’s Premier Li Keqiang, who was at that time governor of Liaoning province, stated that some of the data in the country was “man-made” in a confidential memo. The document indicated he evaluated the economy of his region based on three figures, which included electricity consumption, rail cargo volume, and the amount of loans issued. WikiLeaks obtained Li Keqiang’s confidential memo and released it in 2010.

On the other hand, an unnamed official from the National Bureau of Statistics in China said, “Some regions may have inflated the statistics due to their distorted perception of achievements given the fact that the performance assessment of local governments is often linked with GDP growth.”

World Bank estimation for China’s economy

Data from the World Bank estimated that China’s economy is around £5.1 trillion, making it the second-largest economy worldwide after America at £9.8 trillion. The economy of the United Kingdom is approximately £2.4 trillion.

The Economic Information Daily said the discrepancy in data from local governments and the central government has been present for more than two decades. However, the newspaper noted that the discrepancy is getting increasingly wider in recent years.

Accuracy of economic data

The Xinhua news agency noticed the same problem. The news agency pointed out the accuracy of China’s economic data has been dubious for years because local officials seemed to manipulate the figures higher as part of their promotional strategies.

China’s economy grew 7.7% in the first nine months of the year based on the official data from the government for the third quarter. China’s target is to achieve a growth rate of 7.5% this year.

Last June, China’s paramount leader Xi Jinping said the official performance of the economy of the country should not be simply based on the GDP growth rates, rather, officials must also include several factors such as the improvement in the well-being of people and the environment.