China’s Q1 GDP of 7% likely overstated, could be below 6%
When China released its tabulation of first-quarter growth earlier this month, the 7% figure—the worst in six years—stirred fears of a deepening slowdown.
It also raised fresh doubt about the trustworthiness of China’s own statistics.
“Growth Likely Overstated,” said a Citibank report, concluding that actual quarterly growth could be below 6% year to year, depending on the factors weighed. Other research firms put their numbers far lower, with Capital Economics pegging the quarter at 4.9%, the Conference Board’s China Center at 4% and Lombard Street Research at 3.8%.
Efforts to discern China’s actual growth rate have kept economists pinned to their calculators for years, and for good reason.
For one, the figures are suspiciously smooth, with none of the sharp gyrations seen in the U.S. or other economies. The methodology often appears inconsistent or contradictory. Also, no one knows how China accounts for inflation when tabulating its gross domestic product.
