Shannon Brandao
Shannon's excerpt from the article: "😏 FT [excerpt]: When #China’s premier, Li Qiang, announced at #Davos on Tuesday that the country’s #economy grew at an estimated 5.2 per cent in 2023 it caught economists off guard. Many had projected a figure close to Beijing’s 5 per cent growth target — but markets had not expected the data to come until Wednesday, as per the official release schedule. It is fair to say that this is not the only example of China’s hazy approach to reporting national statistics.
Economists now largely consider Beijing’s official economic data to be only a reference point. While China puts significant resources into its National Bureau of Statistics, trust in its output has been dented by deteriorating #transparency. The number of economic indicators made available by the agency has dropped significantly since President #XiJinping became leader in 2013. At the same time, forecasters have become more sceptical over China’s official gross domestic product numbers. The country’s slowdown in trend growth over the past decade has increased the spotlight on its system of GDP targets.
...Staggeringly, Rhodium Group thinks China’s growth last year may have been as low as 1.5 per cent. Capital Economics’s 'China Activity Proxy' suggests that Beijing has been overestimating its output notably since the start of 2022. Its modelling also implies faster growth in 2023 as official data may have lowballed the extent of Covid-19 disruption the year before.
...A lack of transparency, subpar methodologies and the scope for data manipulation are common in much of the so-called developing world. Indeed, researchers lament the dearth of credible economic data across Africa. Large informal sectors and limited resources mean measurement is not simple either. Even advanced economies have data problems; Britain’s labour market survey suffers from a potentially distorting low response rate.
Yet as the economic and demographic centre of gravity shifts away from the west it is even more important that developing world data becomes less opaque. Domestic policymakers will struggle to tackle and identify barriers to economic growth without decent numbers. Foggy #statistics add risk for #investors, and can raise the cost of capital for developing nations. For China and India, in particular, trust in their data is important to maintain and attract the interest of multinationals and capital markets. Ambiguity is not good for companies."
#news #business