China Claims Three Straight Quarters Growth at 6.7%

On Wednesday, Beijing’s National Bureau of Statistics reported that China’s gross domestic product in the third calendar quarter of this year grew 6.7%. That is the same rate that was announced for the two most recent quarters.

As Mark Magnier reports in the Wall Street Journal, Wednesday, the three quarters of identical growth “was the first time since Beijing started releasing quarterly figures in 1992 that it had achieved such a feat of consistency.” “It’s quite implausible,” said Julian Evans-Pritchard of Capital Economics to the paper.

The news, however, is not that the People’s Republic of China is fabricating statistics. That, after all, has occurred almost since the founding of the Chinese communist state in 1949. The news is that the constant repetition of Beijing claims seems to be defining the global narrative even though those claims might brazenly overstate China’s true economic performance.

For example, if Beijing is engaging in “implausible” deception, it seems odd that, the Wall Street Journal would essentially give the NBS numbers a pass by reporting Evans-Prichard’s explanation that China’s statisticians were just “smoothing the data,” making up for a soft first quarter by underreporting growth in the third. The paper goes on to reinforce the basic reliability of Beijing’s statistics. “Economists say Chinese growth data appears to be massaged by one or two tenths of a percentage point—worth $10 billion to $20 billion in output,” the Journal writes. “Any more would draw heightened global scrutiny, they say.”

Nowhere, however, did the Journal hint that China could be growing at a substantially lower rate. Yet analysts, like Citigroup’s Willem Buiter believes Chinese growth is about half what is routinely reported. Christopher Balding of Peking University’s HSBC Business School, suggests China’s economy is close to a zero rate.

Similarly, neither CNBC nor Fortune suggested that the highly dubious 6.7% figure could be a much more serious distortion.

The fact is that no one knows China’s real growth rates—the country is too big, the political system too opaque, and its economy changing too fast for accurate measurement—but Beijing’s announced numbers, first and foremost, represent the reference point and framework the Communist Party wants the world to believe.  

China’s statisticians are so accustomed to setting the boundaries of discussion that now they have just gotten arrogant. It is extremely unlikely that any developing economy has ever experienced three straight quarters of identical growth rates. Such a phenomena defies common sense, if nothing else. Even mature economies show some volatility.

Yet we cannot be surprised that Chinese leaders, who are so used to dictating to their own people what is true, would try to dictate to outsiders, especially because they have been so successful in the past.

And how about growth in the current quarter? As CNBC reports, Suan Teck Kin at Singapore’s UOB expects 6.7% growth.

Of course, 6.7% growth in Q4 would be ridiculous, but in these circumstances why would anyone suggest another number?

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