CHINA TOPIX

11/21/2024 03:39:07 pm

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US Fed Researcher Says China's Economic Data Reliable

US Fed Researcher Says China's Economic Data Reliable

Flags fly over the Federal Reserve Building in Washington, D.C. (Photo by Mark Wilson/Getty Images)

A United States Federal Reserve researcher announced recently that the official gross domestic product (GDP) data released by China is reliable.

Jun Nie, senior economist with the Federal Reserve Bank of Kansas City, told the official Xinhua news agency that his own research showed that China's official GDP figures align well with the US Federal Reserve figures.

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Nie issued the note after he constructed an alternative measure of China's real GDP growth.

"Our measure aligns well with (China's) official GDP figures, indicating official GDP figures remain a useful and valid measure of Chinese economic growth," he said in a research note.

Nie's model utilizes a series of sectoral data that capture the strength of key sectors of the Chinese economy from the last quarter of 2008 to the last quarter of 2014.

"The model captures the variations in Chinese GDP growth fairly well and could explain about 99 percent of Chinese economic growth during this period," Nie was quoted by Xinhua as saying.

The researcher added that China's official GDP data captures the overall Chinese economy very well.

Nie's research note came following reports that questioned China's GDP data. Some reports said the country's growth might be overvalue.

Earlier, National Bureau of Statistics (NBS) deputy head Xu Xianchun issued a statement blasting such reports, adding that some analysts used the weighted average method that only counts some industrial output.

According to the NBS, the country's economy grew 6.9% year-on-year in 2015, the slowest growth in 25 years.

Meanwhile, China's manufacturing activity contracted for the seventh straight month in February, according to a government survey.

The official manufacturing Purchasing Managers' Index (PMI) came in at 49.0, below economists' forecasts for 49.4 and January's reading of 49.4.

The February reading was also the lowest since November 2011, when it was also 49. A number below 50 points indicates a decline in factory activity, while one above suggests expansion.

Manufacturing, however, is no longer China's primary economic engine but still makes up about 40 percent of GDP. 

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