18 - The Economy of China Economics 162 Topic 4 Chinas...

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Economics 162 The Economy of China Topic 4 – China’s Modern Growth Experience: A Review of the Evidence Professor David Roland-Holst Department of Agricultural and Resource Economics Tuesday and Thursday, 11-1230pm, 10 Evans Hall
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Roland-Holst 2 Economics 162 GDP: Data and Problems I • The Official data (After 2009 Revision) Average annual growth (1979-2009): 9.9% 2005: 11.3% 2006: 12.7% 2007: 14.2% 2008: 9.6% 2009: 9.2% Questions Is the official data reliable? Is the growth rate overstated? Alternative method of estimation: proxies Using electricity consumption growth rate, if elasticity of electricity consumption is constant
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Roland-Holst 3 Economics 162 GDP: Data and Problems II Possible problem (1) Miscalculation of the GDP deflator Growth rates could be overstated by 1-2% If so, growth is around 8% and growth per capita is around 7% Possible problem (2) Reporting incentives by local officials Overstating at trough and understating during boom Overstating in poor areas and understating in rich areas Possible problem (3) Missing data (small-scale, private firms)
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Roland-Holst 4 Economics 162 Growth is Real • Growth is still very impressive even under possible downward revision Comparable growth to fastest growing economies Population almost three times that of 8 high performing economies: Japan, South Korea, Taiwan, Hong Kong, Singapore, Malaysia, Thailand, and Indonesia Growth measurement in physical terms (not in value) Production in steel, automobile, housing, highway etc. Consumption per capita
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Roland-Holst 5 Economics 162 2004 Economic Census and GDP Revision • GDP revision based on the first economic census in 2004 • Announcement on December 20, 2005 – Upward revision of 2004 GDP by 16.8% (2.3 trillion yuan or $285 billion) to 16 trillion yuan – 2.13 trillion yuan was added to service sector – 19 provinces were up, 12 provinces down • Main reasons – To collect data in a more inclusive way
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Roland-Holst 6 Economics 162 2004 Economic Census and GDP Revision • Growth rates adjustment from 1993 to 2004 – 2000: from 8.0% to 8.4% – 2001: from 7.5% to 8.3% – 2002: from 8.3% to 9.1% – 2003: from 9.5% to 10.0% – 2004: from 9.5% to 10.1% • As a result adjustment for average growth rate in 1979- 2004: from 9.4% to 9.6%
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Roland-Holst 7 Economics 162 2009 Economic Census and GDP Revision •Growth rates adjustment from 2005 to 2009 –2005: from 9.9% to 11.3% –2006: from 10.7% to 12.7% –2007: from 11.4% to 14.2% –2008: from 9% to 9.6% –2009: from 9.1% to 9.2% •As a result adjustment for average growth rate in 1979-2009: from 9.5% to 9.9%
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Roland-Holst 8 Economics 162 Economic Census and GDP Revision • Is this revision reliable? – Not a surprise to international investment banks
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This note was uploaded on 03/18/2011 for the course ECON 196 taught by Professor Pierre during the Spring '10 term at Berkeley.

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18 - The Economy of China Economics 162 Topic 4 Chinas...

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