GDP calculation – China

Few days back, I was searching for Penn World Tables (PWT). They have moved. They are now here. PWT is a database with information on relative levels of income, output, inputs and productivity, with country and period coverage depending on the release.

Read the ‘User’s guide’ for the Penn World Tables v.8.0. Turn to page 42 and take a look at Table 8.

 

There have long been doubts about the accuracy of China’s growth figures. In the academic literature, the debate has been between those arguing that the official statistics get it broadly right (Holz, 2006)and others arguing that official statistics systematically overstate growth(Maddison 2006; Maddison and Wu, 2008).

We find the ‘overstatement’ argument convincing and use alternative NA data based on data from Wu (2011). Table 8 shows average annual GDP growth for each decade since 1952, comparing the official NA data to the adjusted GDP data we use in PWT8.0. It shows that the degree to which growth is overstated varies considerably over time, but is present in every period. As a result,the GDP level in 1952 is more than twice as high according to the adjusted growth figures than according to the official growth figures.

This is what the authors of the user’s guide say. They are Professors Robert Feenstra, Robert Inklaar and Marcel Timmer. This guide was published in June 2013.

Expenditure-side real GDP at current PPPs (in mil. 2005US$) in 2011:

China: USD11.4trn; India: USD4.6trn; USA: USD13.3trn.

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