On January 20, China’s National Bureau of Statistics reported that the Chinese economy grew 6.9 percent in 2015, marking the country’s lowest annual growth rate in 20 years. Alternative estimates by many foreign analysts, mostly based on various forms of the so-called “Li Keqiang Index,” have gauged China’s “true” growth rate to be in a range of 3 to 5 percent. Meanwhile, global economic institutions—World Bank, IMF, OECD, etc.—have largely gone along with the official data.
A deteriorating data environment, and an increasingly closed environment for intellectual discourse, further cloud the picture. For MNCs, what top-line growth assumptions for GDP make sense for the Chinese economy?
In collaboration with Professor Harry Wu, we've recently completed an alternative GDP estimate for 2015 as well as a revision of The Conference Board previous alternative series, focusing on the period from 2000 onward. We arrive at an estimate of 3.8 percent growth for 2015. For the period from 2000 to 2014, this new revision slightly raises the annual average growth rate of our previous estimation from 7.8 percent to 8.1 percent, as compared to the official estimate of 9.5 percent.