Broken Abacus? A More Accurate Gauge of China’s Economy
A series of reform obstacles in China over the past year, including the deflation of the equity market bubble that began in June 2015, have revealed limits in Beijing’s ability to direct economic activity and deliver the historic headline growth of the past several decades. This “New Normal” has increasing relevance to investors and governments around the world. Leaders and business decision makers abroad must make judgments about China’s changing growth model and the even more fundamental question: just how believable is the underlying base of economic activity? Is China really the $10 trillion share of global economic output it claims to be?
In Broken Abacus? A More Accurate Gauge of China’s Economy, Daniel H. Rosen and Beibei Bao independently re-estimate China’s economy in terms of nominal GDP. To produce a result that could be compared with official Chinese figures, they relied on official data when it made sense to do so, while diligently documenting their methodology for future researchers. Die-hard national accounting specialists and macroeconomists will find a multitude of quantitative and qualitative findings in the full study, but the text is readable for experts and general China-interested readers alike. This path breaking study sets the stage for future China analysis where the absolutely size of the Chinese economy, not just the year-on-year change, will be of increasing interest and discussion.