August 17, 2013
China may be exaggerating the size of its economy to the tune of $1 trillion by releasing “willfully fraudulent” inflation and GDP [gross domestic product] data, according to a study out this week.
Numbers from the world’s second largest economy are treated with skepticism by some economists, but this latest report has attempted to quantify the scale of discrepancy.
“There is strong evidence indicating that the rate of real Chinese GDP growth, and ultimately total real GDP, may be significantly over stated,” said Christopher Balding, associate professor at Peking University’s HSBC Business School, and the report’s author.
Through “significant and systematic irregularities”, official estimates overstate China’s true GDP by 8 to 12 percent, or $1 trillion, according to Balding.
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