According to Brookings, much of the manipulation in Chinese official government statistics takes place at the local level. In what the FT described as "a legacy of Maoist state planning", authorities in Beijing hand down growth targets to local officials, who use it to goalseek the official statistics they hand back.
"China's national accounts are based on data collected by local governments. However, since local governments are rewarded for meeting growth and investment targets, they have an incentive to skew local statistics. China's National Bureau of Statistics (NBS) adjusts the data provided by local governments to calculate GDP at the national level," the study's authors said.
Evidence of this is relatively obvious: Year after year, the sum total of China's provincial growth figures is larger than the unadjusted national figures reported by Beijing. Though central authorities accused three provinces of doctoring their data back in 2017, authorities have done little else to discourage the practice.
There are a lot of people who think Brookings is lowballing the number-fudging. Some estimates put the actual GDP number at 50% of the "official" number.
In a speech in Shanghai this week, Michael Pettis, professor of finance at Peking University, warned that China's debt is closely linked to the government's perceived overstatement of its gross domestic product (GDP).
China still has a Communist government. The Soviet Union also inflated their productivity numbers.
Chinese communists have a date with Math:
Get your popcorn ready!
I think Brookings is lowballing it, too.
Big time.
“American think tanks have freely offered estimates ranging from 2% to 4% (which, admittedly, would still put China well ahead of the US).”
False.
“U.S. economy to grow 2.7 percent in 2018, boosted by Trump tax overhaul”