At Forbes Paul Roderick Gregory raises an interesting point. What if Chinese economic growth has been massively overstated over the period of the last 35 years?
The media have largely ignored the alternative estimates of Chinese growth of the Conference Board. These calculations (discussed below) claim that China’s growth has been overstated by some thirty percent over the reform era, that it has averaged around five percent for the past five years, and is little different or lower than the two large Asian Tigers (Taiwan and South Korea) during their thirty years of rapid growth starting in 1960. Alarming is the collapse of total factor productivity (TFP) since 2010, a pattern reminiscent of the USSR during its protracted period of stagnation preceding its collapse.
That would have several implications. First, it would mean there has been no Chinese miracle. Chinese economic growth would actually have been less than Taiwanese or South Korean growth.
Second, it would be consistent with other measures of Chinese economic growth, e.g. container ships in use, oil consumed, etc.
Third, it would suggest that China’s present, lower rate of growth might well persist.
Finally, it should not be lost on us as I’m sure it is not lost on the Chinese authorities that their period of greatest growth was during the period they maintained their strict peg to the dollar.
If China exaggerates economic output, it would be consistent with what we have seen since the days of Mao, local Party leaders trying to meet Quotas and please their bosses and save their jobs.
I’m not too good at this but if the link works this is instructive about the Chinese way.
http://thediplomat.com/2015/10/china-is-still-building-ghost-cities/
“What if Chinese economic growth has been massively overstated over the period of the last 35 years?”
They would be like the US the past three years?