Re: China GDP data corrupt [working paper]

From: Sexy (LL.Cool.Stud_at_VaginaTown.com)
Date: 01/20/05 

Date: Thu, 20 Jan 2005 07:28:52 -0500

So what ?????

On 20 Jan 2005 01:41:10 -0800, "raylopez99" <raylopez99@yahoo.com>
wrote:

>soc.culture.china, sci.econ
>----------------------------------------------------------------------------------------------
>Thesis / Abstract:
>
>China GDP data widely quoted is distorted, in particular the GDP and
>GDP per capita (Purchasing Power Parity). By measuring energy
>consumed, using a suitable correction variable for the energy
>inefficiency of communist economies, and triangulating data with
>countries of proven economic data reliability, the true GDP and GDP per
>capital for China can be computed as between $2.25 trillion < PPP
>(China) < $3.03 trillion, which is less than the often quoted figure of
>$6.449 trillion (2004 est.) by between 33% to 50%.
>
>----------------------------------------------------------------------------------------------
>Analysis:
>
>0. This note arouse from an idea several years ago on China
>productivity by economist Paul Krugman, and from a suggestion that data
>in China is suspect (in Gordon G. Chang's "The Coming Collapse of
>China").
>
>1. I triangulated data as shown below, using the following assumptions,
>and found that there were discrepancies that only can be reconciled by
>assuming China's GDP is less than the often stated figure of $6.449
>trillion (from the CIA Book of Facts website, which admitedly is often
>wrong, but widely quoted). My suspicion, which this short note cannot
>address, is that the often stated data for China is extrapolated from
>the "urban" Chinese, in particular those in large cities, and
>multiplied by the total number of Chinese (including those in rural
>areas), which are living "hand to mouth" (subsistence level).
>
>2. Energy consumed cannot be as easily distorted as economic output.
>So use the below data from the Energy Information Administration
>(www.eia.doe.gov)
>
>3. Modern "Western" states include: France, Germany, Italy, UK,
>Japan and the US
>
>4. Communist countries are well known to waste energy as input for
>every unit of output. For example, and considered representative, is
>the case of post-communist Belarus, which by its own admission is today
>using only 43% of the energy (in coal) it used to use in Soviet times
>(for the same population). As post-communist Belarus is perhaps 33% to
>50% as efficient as modern "Western" states, including Europe, the
>US, and Japan, the implication is that China uses up to 7.14 times
>(inverse of 0.14) the energy that a modern "Western" state uses,
>for a given unit of economic output (see figures below). But, just to
>be charitable and conservative in favor of the official Chinese
>figures, it is assumed that modern China is only 50% as efficient per
>unit of output as modern (2 times energy input needed as for a modern
>"Western" state). This is very conservative in favor of China.
>
>5. Using the figures below for population (assumed accurate) and GDP,
>which are referenced, it can be seen that from a Purchasing Power
>Parity, GDP for China is between $2.25 trillion < PPP (China) < $3.03
>trillion. The reason there is a range is because the US is not as
>energy efficient as Euro-land and Japan (this is a well known
>phenomena, as the US likes to waste energy with large cars, and the
>population density is not as conducive to mass transportation).
>
>6. The implication is that China is 'equivalent' to 20.4% of US GDP
>(PPP), or equal to a population of 60 million Americans, at worse, or,
>at best, equal to 121 million European-Japanese, or 3.03 trillion ($).
>
>
>7. Another statistic that is telling: the vast majority (some say 80%)
>of the population of China is still "rural". Multiplying 0.20 *
>1299 mil = 260 million "urban" Chinese. If you don't factor any
>"inefficiency" energy deflator, x", that is assume x = 1, you get
>242.3 million Chinese from the energy figures below. This is
>equivalent to a 19% urban population. It is reasonable to assume that
>most of the data generated by government organs in China is from the
>"urban" sector, consistent with the anecdotal evidence that the
>Chinese rural sector is not thriving.
>
>8. The author of this note lives in CA, is a mutual fund investor in
>China, is not an economist, and believes in the future of China.
>Serious replies welcome.
>
>
>In conclusion: the data for GDP for China that states GDP is $6.449
>trillion is false. Their true GDP is probably at least 33% to 50% of
>this figure. Even this range is probably high, since energy efficiency
>in communist countries is typically much less than 33% to 50% of their
>"Western" counterparts (Europeans, Japanese and Americans).
>
>----------------------------------------------------------------------------------------------
>RAW DATA:
>----------------------------------------------------------------------------------------------
>Energy Consumption per region (1992-2001) Source: Energy Info. Admin,
>Intl' Energy Database.
>
>Country / Population / Energy Consumption (Quadrillion BTU) / Ratio
>Million people per QBTU
>
>France / 60.4 mil/ 10.52 QBTU/ 5.74
>Germany / 82.4 / 14.4 / 5.72
>Italy / 58.1 / 8.11 / 7.2
>UK / 60.3 / 9.8 / 6.12
>JP / 127.3 / 21/92 / 5.8
>
>Average of above: 6.109 Million People per QBTU (inverse = 0.1637
>QBTU/Mil)
>
>US / 293/ 96.32 / 3.04
>China / 1299 / 39.67 / 32.7
>
>China: 39.67 QBTU * 6.109 Mil people / QBTU = 242.3 million people
>(not deflated)
>Or, for US figures: 39.67 QBTU * 3.04 Mil/QBTU = 120.6 million people
>(not deflated)
>
>* Communist "inefficiency" energy deflator, "x", of x = between
>33% to 43%, or, at best (factor of safety), say 50%
>
>----------------------------------------------------------------------------------------------
>* For the production of the unit of GDP Belarus uses 4-5 times more
>fuel and energy resources than western countries. The country consumes
>annually more than 30 tons of conditional fuel (coal equivalent), i.e.
>approximately about 3 tons of conditional fuel per one citizen (versus
>7 thousand tons in the Soviet times)(3/7 = 43%) while in the rest of
>the world this indicator constitutes 1 ton. (1/3=33%) For example, last
>year per capita consumption of gas and electricity was 1,850 cubic
>meters and 3,400 kWh [2586 kWh per person], accordingly. This is nearly
>twice an average European level. (0.5). [So x = deflator is as low as
>(.43)(.33) = 0.14, or (.43)(.5) = 0.215, or as high as .33 or .43 (the
>latter two numbers assuming modern post-communist Belarus today is as
>energy efficient as the "West" is today, which is not realistic,
>but forms an upper bound. By choosing x = 0.50, the factor of safety
>is even greater (more conservative in favor of China), by a factor of
>between 0.5/0.14 = 3.6 times, or 0.5/0.215 = 2.33 times.
>Source: www.nationmaster.com
>China electricity = 1019 kWh per person
>Japan = 7579 kWh per person
>US = 12406 kWh per person
>Russia = 5348 kWh per person
>This data not directly relevant, except to show that China is unusually
>low in electricity per capita, approaching that of African states,
>which is not consistent with the thesis of the world's second largest
>economy. One can argue this is because of the large population, but,
>if so, this is consistent with the assumption is that most of the
>Chinese in the 'rural' parts are probably living at a
>'subsistance' level, see the note above about "urban" versus
>"rural" Chinese.
>----------------------------------------------------------------------------------------------

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