China looks at new ways to measure GDP

The deputy head of China’s statistics bureau has argued for including unrecorded sharing economy activities in GDP figures

 
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The validity of Chinese economic data has long been a topic of concern among economists. Many express scepticism over China’s official GDP data, suspecting the Chinese Government has likely manipulated the figures.

China is now set for a shake up regarding how it records its GDP figures, with Chinese officials suggesting that activity from the so-called sharing economy should be included

Xu Xianchun, the Deputy Head of the National Bureau of Statistics of China, recently told a press conference that certain free services now provided in the sharing economy are not being included in official GDP results, thereby causing the size of the Chinese economy to be underestimated.

Many economists express scepticism over China’s official GDP data, suspecting the Chinese Government has likely manipulated the figures

Activities such as couch surfing or crowd-sourced answers provided online are not registered as a transaction, and therefore not counted in GDP figures. However, Xu argued, they still should be thought of as economic activity. “The sharing economy shares homes, cars, parking spaces, books — the participants are individuals”, Xu was quoted as saying by the Financial Times. “So traditional statistic methods are unable to collect complete statistics.”

To include these uncounted activities, Xu argued that China should develop new methodologies that will ensure their inclusion. However, while accounting for the as yet unrecorded sharing economy activity of hundreds of millions of Chinese consumers would likely provide a significant boost to China’s GDP figures, it is likely to further fuel global mistrust of their credibility.

The proposal comes at the same time as the Chinese search engine provider, Baidu, has announced that it hopes to launch its own measure of economic growth. The internet giant claims that it intends to create its own macroeconomic indicators, using data it collects from its 700 million users. Speaking to CNN Money, Wu Haishan, Senior Data Scientist at Baidu, said that the internet firm’s many users “represent a good portion of Chinese consumer behaviour”.