China gets $1 trillion boost from dodgy data: Report
Source: CNBC
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.
... "If inflation data is not accurate, or is willfully fraudulent, as appears to be the case, it will impact many other areas of economic and financial data leading to large disparities over time," said Balding. "It is disturbing that a statistical body would so obviously manipulate and produce blatantly fraudulent data."
Read more: http://finance.yahoo.com/news/china-gets-1-trillion-boost-130102113.html
The Magistrate
(95,242 posts)Being itself a criminal enterprise specializing in fraud, Hong Kong Shanghai Bank is well suited to recognizing fraudulent activity by others....
Hosnon
(7,800 posts)Sure, it's a bad thing if the bank engages in fraudulent behavior, but it doesn't matter here.
Helen Borg
(3,963 posts).
davidpdx
(22,000 posts)That would never happen!
On the Road
(20,783 posts)They did the same thing for decades under collectivism.
Lack of transparency and trust in business and economic data is a huge issue in China. The ethics of the business world are not nearly as high as in the US. The Chinese themselves probably don't know the real extent of the situation.
blm
(113,010 posts).
elleng
(130,732 posts)'As the Chinese economy boomed, few cities soared faster or higher than Shenmu, a community of nearly 500,000 in northwestern China. . .
But a painful credit crisis is now spreading across Shenmu and cities nearby, as thousands of businesses have closed, fleets of BMWs and Audis have been repossessed and street protests have erupted.
Now the leading purveyors of Western fashions are deserted, monthly sales at restaurants are down as much as 97 percent and the marble entrance to the Fortune Garden Club is shuttered. All but one of the citys car dealerships have failed. . .
Its an economic crisis just like the United States has had; just like it, said Wang Ting, an operator of an illegal casino in Fugu, near Shenmu. Theres no cash, everyone stays home without a job, theres no way the economy can recover.
Shenmu, and nearby cities like Ordos and Fugu, are at the leading edge of broader troubles that are beginning to afflict the entire Chinese economy. Across China, growth has slowed. With the slowdown have come rising defaults on loans made outside the conventional banking system, chronic overcapacity in many industries like coal mining and steel production and, in particularly troubled cities like Shenmu, a sharp decline in previously debt-fueled prices for real estate and other assets.'
http://www.nytimes.com/2013/08/16/business/global/easy-credit-dries-up-crippling-chinese-cities.html?hp
Kolesar
(31,182 posts)jtuck004
(15,882 posts)In July of 2013, the U.S. gross domestic product will officially grow three percent, due to a few additions to the statistics that economists have been using to calculate GDP for years.
From now on, government statisticians will take into account money earned from creative works including movies, television shows, books, theater and music. Money spent on research and development, which has, until now, been considered a cost of doing business will also be included.
Here.
We didn't make anything new, we didn't add anything. We just decided to recognize the spending on IT as an investment instead of a cost, and in the process, poof, we improved our debt to gdp ratio and made ourselves look better, going all the way back to when the government first started putting our modern statistics together.
We put $85 billion of taxpayer money into the pockets of the primary dealers on Wall Street, have reports that banks are withholding approximately 7 million reo (bank-owned properties) from the market to keep prices high, and then crow about how prices are rising, while our home ownership rate is now about what it was in 1996, but with 50 million more people.
All countries manipulate their numbers. It's whether lives really improve that we should be looking at.
onehandle
(51,122 posts)You think that business gets away with murder here?
They make our 1%ers look like amateurs.
Ikonoklast
(23,973 posts)The warnings are now coming closer together.