U.S. experts said China's official gross domestic product (GDP) data is consistent with the overall strength in the world's second largest economy and remains a useful and reliable indicator of the country's economic growth.
In a research analysis published last week, Jun Nie, a senior economist with the Federal Reserve Bank of Kansas City, said he constructed an alternative measure of China's real GDP growth, which aligned well with China's official GDP figures released by the National Bureau of Statistics (NBS).
"My research mainly examines one important aspect of the data, consistence. To me, this is also where much of skepticism of Chinese GDP data lies," Nie told Xinhua in a recent interview.
"In particular, one popular skepticism among market participants on China's GDP growth number is that the headline number appears inconsistent with some sectoral measures," he said, referring to the example cited by skeptics that China's electricity usage has grown much slower than before while official GDP growth has slowed only gradually.
"Focusing on just one area may not be able to capture the overall strength of the Chinese economy," Nie argued. "The economic structure in China is experiencing some changes -- some traditional sectors may have slowed, but some new areas may be growing relatively faster than before."
Nicholas Lardy, a senior fellow at the Peterson Institute for International Economics and a leading expert on China's economy, echoed Nie's views, saying that the pessimistic narratives about China's economy "focus excessively on China's industrial sector", where growth has been moderating for six years.
"Little noticed is the fact that services have become the major driver of China's economic growth and now account for over half of the GDP," Lardy said Tuesday in a research analysis of reality check on China.
He added that the ultra-bearish view on China's economy is not consistent with the strong growth of wages, household disposable income, airline and rail passenger traffic, and other indicators of strong service sector growth.
Therefore, it's important to provide a comprehensive view by taking into consideration measures covering different sectors, Nie said.
The alternative model built by Nie to measure China's GDP growth uses a series of data that capture the strength of key sectors of the Chinese economy, including indicators on manufacturing activity, consumer spending, the real estate sector, and the service sector.
Despite some possible changes in different sectors, "My analysis shows the Chinese GDP growth figure is consistent with the overall strength in the economy as captured by a wide range of indicators from both the official source and the market source," Nie said.
