Are Chinese Official Statistics Reliable? (November 2, 2005) Gregor Cho!

, "rinceton #niversit $% &ntro'(ction On the )(estion raise' in this *a*er, +Are Chinese official statistics reliable?, economists an' general observers have 'ifferent o*inions% - vie! is that the statistics are b an' large reliable an' (sef(l for 'ra!ing concl(sions abo(t the Chinese econom b(t some statistics are not reliable% A general 'isc(ssion of 'ata )(alit is *rovi'e' in section 2% &n section . & !ill *resent evi'ence for the (sef(lness of official 'ata b 'ra!ing from m o!n e/*erience in (sing them to *erform econometric anal ses in or'er to (n'erstan' the Chinese econom % &n section 0 & !ill cite some e/am*les of errors in official statistics% Section 5 is an e/amination of *ossible errors in the official estimates of G1" gro!th% Altho(gh gro!th an' ine)(alit are t!o e)(all im*ortant to*ics in China2s economic 'evelo*ment to'a , & !ill not e/amine the )(alit of the 'ata on income ine)(alit beca(se it is not consi'ere' a ma3or iss(e in the 'isc(ssion of 'ata )(alit % 4his *a*er 'oes not 'isc(ss 'ata bias an' 'ata acc(rac se*aratel as it treats 'ata bias as a s*ecial case of 'ata )(alit % Section 5 concl('es% 2% 1ata 6(alit in General A most caref(l an' s stematic st(' on this s(b3ect is 7ol8 (2005) !hich contains the follo!ing concl(sions on 'ata )(alit (*%$0)9 +7o!ever one ma eval(ate the allegations of 'ata falsification in certain ears, even the critics ac:no!le'ge that long;r(n gro!th tren's are a**ro/imatel correct% 4he 'ata *roblems re*orte' here are facts !hich are (nli:el to be (ni)(e to China< other transition an' 'evelo*ing co(ntries e/*erience similar 'iffic(lties% 4he margins of errors are inevitabl larger than in 'evelo*e' co(nties, *erha*s even (ncomfortabl large=,

& agree !ith the above assessment an' also !ith the a(thor2s statement (on *% >) that +har' evi'ence ?on 'ata mani*(lation@ is relativel scarce=, 4his *a*er 'ra!s from m o!n e/*erience in e/amining an' (sing Chinese official 'ata as an (*'ate of Cho! ($AB5) an' is s(**lementar to the caref(l st(' of 7ol8 (2005) to !hich & essentiall agree% 4he evi'ence available to me has le' to the follo!ing *ro*ositions% A% China Statistical Yearbook *(blishe' ann(all since $AB$ b the Chinese National C(rea( of Statistics (formerl State Statistics C(rea() is the *ro'(ct of its staff members locate' in Cei3ing an' in vario(s *rovinces an' cities !ho are re)(ire' b la! to *rovi'e acc(rate statistics as *ointe' b Cho! ($AB5, section 5, on the Da! of Statistics *asse' b the National "eo*le2s Congress (N"C) on 1ecember B, $AB.)% 7ol8 (2005, *% 22) (*'ates this legal re)(irement !hen he !rites9 +4he Statistics Da! states that Estatistical *ersonnel m(st see: tr(th from facts, strictl abi'e b *rofessional stan'ar's ?diode], an' lea'ers of localities, government 'e*artments, or other (nits ma not or'er or as: statistical 'e*artments an' statistical *ersonnel to change or falsif statistical 'ata%2 (N"C, $5 -a $AA5, Art% 20 an' >)% Fet the r(le of la! ma have to 'efer to "art *rimac %, & !ill 'isc(ss *ossible *olitical infl(ence belo!% C% Re*orts of the Chinese "remier on the !or: of the government *resente' before the ann(al meetings of the Chinese National "eo*le2s Congress are base' on official statistics relate' to the accom*lishments of the *ast ear or to the ann(al *lan (a *art of the Give;Fear "lan) for the coming ear% 4his sho!s that the statistics are (se' for internal *lanning *(r*oses an' are s(b3ect to revie! b all members of the National "eo*le2s Congress an' b international observers% 4here is no incentive for the *remier to lie not onl beca(se his re*ort is (n'er the scr(tin of the entire !orl' b(t beca(se (sing fabricate' 'ata can onl lea' to

conf(sion of all government officials (sing s(ch 'ata for their !or: in economic *lanning an' 'evelo*ment% C% N(mero(s scholars have (se' Chinese official 'ata to *erform econometric anal ses that are *(blishe' in *rofessional 3o(rnals an' s(b3ect to the revie! of referees% 4his sho!s that most economists believe that the 'ata (se' are reliable eno(gh for 'ra!ing vali' concl(sions abo(t the Chinese econom % 1% Hrrors in the 'ata have been fo(n', sho!ing that some 'ata are not reliable% H% An obvio(s im*lication of *ro*ositions C an' 1 is that one can (se official 'ata b(t sho(l' e/ercise ca(tion to ma:e s(re that the 'ata are reliable for the *(r*ose at han'% "ro*osition A is a statement of the mission of the *eo*le *ro'(cing official statistics as re)(ire' b la!% &t is a *artial g(arantee for honest re*orting (nless the staff members are not la! abi'ing% Critics of "ro*ositions A an' C might sa that someho! the staff of the National Statistics C(rea( is (n'er *ress(re from the "remier or other officials of the State Co(ncil to falsif statistics for *olitical *(r*oses% "ro*osition C asserts that both the "remier2s office an' the Statistics C(rea( are (n'er the scr(tin of the members of the National "eo*le2s Congress an' the entire !orl' an' that b (sing falsifie' 'ata government officials cannot *erform effectivel their !or: in economic 'evelo*ment% Gor the critics to be right, the "remier or one of the officials (n'er him has to be 'ishonest in 'irecting activities relate' to the Give;Fear "lan, the Statistics C(rea( has to be !illing to assist the 'ishonest *erson b falsif 'ata an' thir'l s(ch coo*erative 'ece*tion is not 'etecte' b observers in the entire !orl'% &t a**ears to me that these three con'itions are 'iffic(lt to be met, altho(gh some critics ma still cite e/am*les of falsif ing the rates of gro!th of G1" either (*!ar's or 'o!n!ar's as a res(lt of *olitical *ress(re, a to*ic to !hich & !ill ret(rn belo!% 4o ans!er the critics of "ro*osition C & )(ote from Cho! (2000, **% 5$;2)9

+&n more recent ears, "remier Ih( Rong3i anno(nce' targets for total national o(t*(t an' o(t*(ts of *artic(lar *rovinces in $AAA, 2000, 200$ an' 2002% A *rovincial governor might have been tem*te' to falsif 'ata to f(lfill the target state' b the "remier, b(t the staff of the State Statistical C(rea( in Cei3ing ha' all the incentive to correct an falsifie' statistics re*orte' from belo!% "remier Ih( !o(l' not have tolerate' s(ch false re*orting an' !o(l' have *(nishe' an one res*onsible%, 4he National C(rea( of Statistics also has staff in its branch officers in 'ifferent *rovinces an' cities to collect 'ata an' to chec: the acc(rac of the 'ata re*orte' (see 7ol8 (2005, **% $$;2))% 4o chec: !hether the C(rea( ten'e' to *(blish o(t*(t 'ata to com*l !ith the targets set b the "remier consi'er the follo!ing ann(al gro!th rates of real G1" *(blishe' in China Statistical Yearbook 2004, table .;., e/ce*t for 2000;5 !hich are base' on an article on inflation in China Daily J(l 2$, 20059 Fear gro!t h Khat evi'ence can the critics *rovi'e to claim that the official gro!th rates in $AAB;200$ are over;estimates? &f the !ere overestimates the C(rea( !o(l' have to lo!er the gro!th rates in later ears to com*ensate for them since all o(t*(t 'ata are also re*orte' in *h sical (nits !hich the rea'ers can chec: in'e*en'entl % 4he C(rea( 'i' have a chance to (n'er;re*ort the gro!th rates after 200$ beca(se the target gro!th rates !ere lo!er than the rates re*orte' in the above table% Outline for the 10th Fi e!Year "lan of the #ational $cono%ic and Social De elo&%ent of the "eo&le's (e&ublic of China, *asse' b the National "eo*le2s Congress on -arch $5, 200$, set a target for ann(al G1" gro!th in the *erio' 200$;5 of +a**ro/imatel > *ercent, an' a target for the ear 2005 to be a**ro/imatel $2%5 trillion (an in 2000 *rices (cha*ter 2, *aragra*h 2)% Girst, the official ann(al gro!th rates in 200$;5 !ere all above > *ercent an' some m(ch above% 4his sho!s that *olitical *ress(re 'i' not force the C(rea( to com*l an' that if it ha' 'one so b overestimating the gro!th rates the 0 $AA5 A%B $AA> B%5 $AAB >%B $AAA >%2 2000 B%0 200$ >%2 2002 B%A 200. $0%0 2000 A%5 2005 A%.

ears before the C(rea( co(l' have re'(ce' the gro!th rates in these later ears to com*ensate an' it 'i' not% Secon'l , a**l ing the above gro!th rates from 200$ to 2005 !e fin' that the real o(t*(t in 2005 !o(l' be $%5.> times the o(t*(t of 2000% Given a 2000 G1" of B%A5 trillion, the re*orte' 2005 G1" in 2000 *rices !o(l' be $.%>5 trillion, e/cee'ing the $2%5 trillion target b $0 *ercent% 4h(s the Statistics C(rea( allo!e' an overestimate of the target b abo(t 2 *ercentage *oints *er ear for five ears% 4he gro!th targets might have been set conservativel to ins(re a high chance of being achieve', b(t the evi'ence for the C(rea( to re*ort real o(t*(t falsel in or'er to com*l !ith anno(nce' targets is lac:ing from the above 'ata% 4he above 'isc(ssion also *oints to the im*ossibilit of fabricating incorrect gro!th rates for a long *erio'% As *ointe' o(t in Cho! (2000, *% 5A;50)9 +Gor the *(r*ose of st(' ing long;term tren's, !e can tolerate si8able inacc(racies in the levels of the variables= 4o ill(strate, accor'ing to official 'ata, China2s G1" !as .52%0 billion (in constant $A>B (an) in $A>B an' 2.$2%A billion in $AAB% 4he e/*onential rate of gro!th in this 20; ear *erio' is ?ln(2.$2%A);ln(.52%0)@L20 or 0%0A25B=Det both the $A>B an' the $AAB G1" be overestimates, b(t the latter be an overestimate b as m(ch as .0 *ercent more, relative to the former% Ke therefore sho(l' revise it 'o!n!ar' from 2.$2%A to $>>A%2 billion (an% 4he revise' ann(al e/*onential rate of gro!th rate is ?ln($>>A%2) M ln(.52%0)@L20 or $%0B. =4h(s even s(ch a large relative error in the $AAB estimate 'oes not alter the concl(sion of a ver ra*i' rate of gro!th% 4he reason is that !hen the estimate for the terminal ear is re'(ce' s(bstantiall , the effect is average' o(t over 20 ears in calc(lating the average rate of gro!th%, .% #sing Official Statistics to #n'erstan' the Chinese Hconom 4his section s(mmari8es the main *oints of several econometric st('ies & have *erforme' (sing Chinese official 'ata% Since the st('ies confirm !ell establishe' economic h *otheses (sing these 'ata, the )(alit of the 'ata an' the vali'it of the h *otheses reinforce each other% 7o!ever !e 'o not *rovi'e a s stematic anal sis of !hat :in's of errors can be tolerate' in each st(' beca(se this !o(l' ma:e the *a*er too length %

.%$ 1escri*tive Statistics of the Chinese Hconom &n the *rocess of !riting Cho! ($AB5) & (se' Statistical Yearbook of China to 'escribe some facts abo(t the Chinese econom % &n the earl $AB0s, Kestern observers often claime' that Chinese official statistics !ere (se' to fool the o(tsi'e !orl' abo(t China% 4his claim !as s(**orte' b stories !ritten b ne!s re*orters !ho ha' visite' China an' !rote glorif ing stories '(ring the *erio' of the C(lt(ral Revol(tion an' later fo(n' them to be (ntr(e% 4he fact that Chinese officials misle' visitors abo(t China has been !ell 'oc(mente'% 7o!ever, an' some!hat s(r*risingl , s(ch falsification 'i' not s(rvive !hen Statistical Yearbook of China began to be *(blishe' in $AB$% Det me cite some e/am*les% 1(ring the Great Dea* Gor!ar' -ovement of $A5B;5$ Chairman -ao Ie'ong (rge' the farmers to increase their o(t*(t at an (nreasonable rate% Some Comm(nes 'i' re*ort m(ch larger o(t*(t than act(all obtaine' an' some s(ch re*orts a**eare' in Chinese ne!s*a*ers at the time% 7o!ever, gross agric(lt(ral o(t*(t val(e in constant $A5> *rices re*orte' in Statistical Yearbook of China 1)*1, *% $>, !as re'(ce' from 5.%> billion (an in $A5>, the ear before the Great Dea* to 0.%0 billion in $A52, the ear after the Great Dea*, !hile national income in constant *rices 'ecrease' b .$ *ercent from $A50 to $A5$ (Yearbook 1)*4, *% .0)% Statistics of *o*(lation !as im*rove' !hen China receive' hel* from the #nite' Nations in the collection of *o*(lation 'ata in the earl $AB0s% Official statistics have been (se' b the Office of "o*(lation Research at "rinceton #niversit for 'emogra*hic st('ies of the Chinese econom % Accor'ing to Statistical Yearbook of China 1))0, *+ A0, the 'eath rates in $A5B M $A52 !ere res*ectivel $$%AB, $0%5A, 25%0., $0%20 an' $0%02 *er tho(san' *ersons !hile the birth rates in these ears !ere res*ectivel 2A%22, 20%>B, 20%B5, $B%02 an' .>%0$% 4hese 'ata sho! the large increases in the 'eath rate an' s(bstantial re'(ctions in birth rate follo!ing the economic 'isaster create' b the Great Dea* Gor!ar' -ovement% Coth s(ggest the starvation or maln(trition of the *o*(lation '(ring this *erio' !hich Chinese government 'i' not attem*t to conceal from the 'ata%

1(ring the C(lt(ral Revol(tion in $A55;$A>5, !hen some Kestern re*orters having visite' China 'escribe' the co(ntr as a (to*ia, Statistical Yearbook of China 1)*1, *% 05$ re*orts that st('ent enrollment in higher e'(cation !as 0B tho(san' in $A>0 as com*are' !ith >50 tho(san' in $A5. an' $,020 tho(san' in $A>A% 4he C(lt(ral Revol(tion ca(se' almost all (niversities to close as the 'ata reveal% Concerning real !age of all state;o!ne' (nits, Yearbook 1)*1, **% 0$$;2 an' 0.5;5 , s(mmari8e' in Cho! ($AB5b, *% $0.), gives average ann(al !age *er !or:er to be 5.> (an in $A5>, the last normal ear before the Great Dea*, an' 502 in $A>>, the ear before economic reform starte'% 4he re'(ction in real !age *er !or:er is more since the general retail *rice in'e/ !as $2$%. in $A5> an' $.5%0 in $A>>% 4his reveals that '(ring t!ent $A>> real !age of the Chinese !or:ers act(all 'ecline' b $5 *ercent% .%2 An Aggregate -o'el of National &ncome 1etermination &n Cho! ($AB5) & (se' official 'ata from $A5. to $AB2 on national income, cons(m*tion an' acc(m(lation (investment) to estimate a sim*le mo'el of the Chinese macro; econom % & fo(n' the cons(m*tion f(nction to satisf the *ermanent income h *othesis of 7all ($A>B), !hich states that cons(m*tion is a**ro/imatel a ran'om !al:, i%e%, ann(al change in cons(m*tion is not *re'ictable b *ast 'ata, an' the investment e)(ation to satisf the acceleration *rinci*le, i%e%, investment is a f(nction of the rate of change of income rather than the level of income% 4he *ermanent income h *othesis states that cons(m*tion is base' on income in a longer time hori8on than 3(st the c(rrent ear% 4he acceleration *rinci*le is base' on the h *othesis that 'eman' for ca*ital stoc: 'e*en's on the level of o(t*(t< since investment is the rate of change of ca*ital stoc: it !ill 'e*en' on the rate of change of income or o(t*(t% 4hese la!s sho(l' a**l to China as 'o man other economic la!s (se' to st(' the Chinese econom s(mmari8e' in Cho! (2002)% 1eviations of observe' val(es of national income from *re'ictions base' on this mo'el reveale' s*ecial historical;*olitical events% 4he confirmation of t!o ears of the *erio' of central *lanning from $A5> (the last ear of the first Give;Fear "lan) to

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im*ortant h *otheses in macroeconomics (sing Chinese 'ata *rovi'es s(**orting evi'ence for both the h *othesis an' the reliabilit of the 'ata% .%. Gamil H/*en'it(re "atterns from Cross;Section 1ata China Statistical Yearbook *rovi'es 'ata on total cons(m*tion e/*en'it(res, an' e/*en'it(res on foo', clothing, ho(sing an' miscellaneo(s items for r(ral an' (rban *o*(lations% #sing 'ata for r(ral families in $AB$ Cho! ($AB5b) estimates linear relations bet!een log e/*en'it(res on the above fo(r categories an' log total e/*en'it(res% 4he estimate' total e/*en'it(re elasticities for China are similar to the estimates for other 'evelo*ing economies an' the 'ifferences can be reasonabl attrib(te' to c(lt(ral an' environmental factors% G(rthermore, 'ata for $AAB iel' similar estimates as the above estimates base' on $AB$ 'ata, as re*orte' in Cho! (2002, *% $5$) 4he stabilit of the *arameters estimate' in the t!o ears len's s(**ort for both the stabilit of Chinese cons(mer behavior over s(ch a long *erio' of time an' the reliabilit of the 'ata (se'% .%0 An Aggregate "ro'(ction G(nction for China Cho! ($AA.) (ses official 'ata to constr(ct a ca*ital stoc: series of China% 4ogether !ith ann(al 'ata from $A52 to $AB. on national o(t*(t an' labor force, this series !as (se' to estimate a Cobb;1o(glas *ro'(ction f(nction for total o(t*(t an' for the o(t*(t of each of five sectors, agric(lt(re, in'(str , constr(ction, trans*ort an' tra'e% All *arameter estimates are reasonable% Certain *ro*erties of the estimate' *ro'(ction f(nction for total o(t*(t seem to ma:e goo' economic sense% Girst, after acce*ting the h *othesis that the e/*onents of ca*ital an' labor s(m to (nit , it is fo(n' that the coefficients are a**ro/imatel 0%5 an' 0%0 res*ectivel % 4his res(lt agrees !ith -an:i!, Romer an' Keil ($AA2) !ho estimate' aggregate *ro'(ction f(nctions for a n(mber of 'evelo*ing economies% G(rthermore, the ca*ital e/*onent of 0%5 agrees !ith the res(lt of a regression of log(o(t*(tLlabor) on log(ca*italLlabor) (sing official 'ata for state;o!ne' in'(strial enter*rises, as sho!n in Cho! ($AB5, *% $2.)% Secon'l , the interce*t term

meas(ring total factor *ro'(ctivit has no increasing tren' (* to $A>A an' begins to increase at abo(t 2%B *ercent *er ear after reform starte' in $A>A% 4his *oint is later elaborate' in Cho! (2002, Cha*ter 5) !hen a longer time;series base' on official 'ata !as available to estimate the *ro'(ction f(nction% .%5 H/*laining &nflation b the Ratio of -one S(**l to 4otal O(t*(t Cho! ($AB>) s(ccee'e' in e/*laining the rate of inflation in China from $A50 to $AB. (sing an error;correction mo'el% 4he error correction mo'el 'etermines the rate of change in the *rice level b its *ast change an' the change in the ratio of mone s(**l to o(t*(t, together !ith an error;correction term% 4he error;correction term is the 'eviation in the *rece'ing *erio' of log *rice level from its e)(ilibri(m level 'etermine' b the log of the ratio of mone s(**l to real o(t*(t% 4his e)(ilibri(m relation is calle' a cointegration relation an' can be consistentl estimate' b a least s)(ares regression of log *rice on log (mone s(**l Lo(t*(t)% Note that '(ring most of the ears of the sam*le *erio' China !as *racticing central *lanning an' et the retail *rice in'e/ !as affecte' b the ratio of mone s(**l to o(t*(t% 4he official in'e/ of retail *rices sho!s a $5%2 *ercent inflation in $A5$ !hich can be easil e/*laine' b the s(bstantial increase in mone s(**l an' es*eciall the ver large re'(ction in real o(t*(t from $2$5,5 in $A50 to B.B%> in $A5$ (see 4able $ of Cho!, $AB>)% Hconomic theor an' acc(rac of official 'ata again reinforce each other in this case% .%5 Hffects of -onetar Shoc:s on O(t*(t an' "rices As an e/tension of the st(' re*orte' in .%5, Cho! an' Shen (2000) (se a NAR in the logs of mone s(**l , *rice level an' o(t*(t to e/*lain inflation an' to st(' the res*onses of *rices an' o(t*(t to monetar shoc:s% 4he res(lt from the estimate' im*(lse res*onses to monetar shoc:s agrees !ith the *ro*osition of -ilton Grie'man ($AA0) that the res*onse of o(t*(t to mone shoc:s ta:es *lace earlier b(t the effect is short;live' !hile the res*onse of *rices occ(rs later b(t lasts longer% 4his st(' is ca*able of e/*laining the increases in o(t*(t in 200. an' 2000 an' the increase in *rices in 2000 in

China follo!ing a ra*i' increase in mone s(**l in 2002 after several ears of fairl slo! an' stea' increase in mone s(**l (* to 2002 an' the absence of inflation '(ring these ears% 4he increase in mone s(**l can be attrib(te' to the fail(re of the Chinese government to raise the e/change rate of the R-C% An (n'erval(e' R-C le' to a large e/*ort s(r*l(s an' a large inflo! of foreign reserves (to an acc(m(late' amo(nt of over 500 billion 'ollars b the en' of 2000)% 4he increase in mone s(**l is a res(lt of *eo*le (sing foreign c(rrenc to e/change for R-C, an' not of the *olic of the "eo*le2s Can:% 4he Chinese government trie' to slo! 'o!n this +overheate', econom b a'ministrative means s(ch as restriction on the amo(nt of cre'it to be e/ten'e' b ban:s an' on ne! constr(ction *ro3ects% H/tensive cre'it e/tension to finance constr(ction in (rban 'evelo*ment !o(l' not have occ(rre' if the ban:s ha' not ha' the mone to len' o(t in the first *lace% .%> Hstimating the Hconomic Doss of the Great Dea* an' the C(lt(ral Revol(tion C constr(cting an econometric mo'el consisting of an aggregate *ro'(ction, an i'entit for aggregate o(t*(t as the s(m of cons(m*tion an' investment, an e)(ation for ca*ital stoc: as the s(m of ca*ital stoc: in the *revio(s ear *l(s net investment an' an e)(ation s*ecif ing the logarithm of total factor *ro'(ctivit as a ran'om !al: !ith shift, Cho! an' O!an ($AA5) an' O!an an' Cho! ($AA5) (se a ' namic o*timi8ation mo'el to e/*lain *er ca*ita o(t*(t, cons(m*tion an' investment (n'er the ass(m*tion that o*timal investment !as generate' b an economic *lanner ma/imi8ing an infinitel 'isco(nte' s(m of f(t(re log *er ca*ita cons(m*tion% 4he mo'el estimate' b official 'ata can e/*lain the en'ogeno(s variables reasonabl !ell% 4he time *aths generate' b eliminating the shoc:s for the +abnormal, ears of the Great Dea* Gor!ar' -ovement an' the C(lt(ral Revol(tion as a co(nter;fact(al e/*eriment *rovi'e sensible estimates of the loss in terms of the en'ogeno(s variables '(e to these t!o tragic *olitical events% .%B 1eman' for e'(cation

$0

4he st(' of 'eman' for e'(cation in China b Cho! an' Shen (2005) !as *artl motivate' b the stri:ing fact that the ratio of total s*en'ing on e'(cation to G1" increase' from .%5 in $AAB to 5%2 in 2002% Kas s(ch a ra*i' increase '(e to a change in government *olic or to basic economic forces of 'eman'% 4he *a*er estimates 'eman' f(nctions for e'(cation at the three levels of *rimar school, secon'ar school an' higher e'(cation an' for total enrollment in all three levels% 4he income elasticities as estimate' b cross;*rovincial 'ata a**ear reasonable, being 0%0 for *rimar schools, 0%B for secon'ar schools an' $%2 for higher e'(cation% 4ime series 'ata from $AA$ to 2002 !ere (se' to estimate *rice elasticities !hich t(rne' o(t to be abo(t 0%. for all levels% 1eman' for total enrollment is 'ivi'e' into 'eman' b non;government an' b government so(rces% 4he former 'e*en's on G1" an' relative *rice !hile the latter 'e*en's on government reven(e an' relative *rice% Reasonable estimates of the elasticities !ere obtaine'% 4he 'eman' e)(ations from these t!o com*onents can e/*lain the ra*i' increase in the ratio of e'(cation s*en'ing to G1" ver !ell% 4he fact that government reven(e from $AAB to 2002 increase' more ra*i'l than G1" hel*s to e/*lain the ra*i' increase in the ratio of government s*en'ing on e'(cation to G1"% 4he small *rice elasticit of 'eman' can e/*lain the increase in total e'(cation s*en'ing in the co(rse of economic 'evelo*ment% As increase in income shifts the 'eman' c(rve for e'(cation (st('ent enrollment) (*!ar' against an inelastic s(**l , the relative *rice of e'(cation goes (*% Kith a small *rice elasticit the increase in *rice lea's to an increase in total s*en'ing% Given a 'eman' f(nction for log enrollment 6 as a linear f(nction of log income F an' log *rice " !ith income an' *rice elasticit 'enote' b a an' Mb res*ectivel , the 'eman' for log (e'(cation e/*en'it(re) or log ("6) is the same f(nction !ith the coefficient of log " change' to $;b% 4he log of ("6LF) e)(als a constant P (a;$) log F P ($;b) log "% &f income elasticit a is close to $ or larger an increase in income F !ill have a small or a *ositive effect !hile the res(lting increase in " '(e to limite' s(**l for e'(cation services !ill have a *ositive effect on the ratio of e'(cation s*en'ing to national income% All *arameters of this mo'el are estimate' (sing official 'ata% .%A H/*lanation of the Rate of Ret(rn to Schooling

$$

Johnson an' Cho! ($AA>) estimate e)(ations to e/*lain log !age of Chinese r(ral an' (rban !or:ers in $ABB b log S ( ears of schooling), ears of e/*erience H, H s)(are', an' '(mm variables re*resenting gen'er, minorit , Comm(nist "art membershi* follo!ing the classic !or: of -incer ($A>0)% 4he rate of ret(rn !as estimate' to be 0%02 *ercent *er a''itional ear of schooling an' .%.A *ercent for (rban !or:ers% S(ch lo! rates of ret(rn are reasonable beca(se !ages at the time !ere still s(bstantiall controlle' an' !ere not 'etermine' b mar:et forces% 4he estimate' effects of being a female (; 0%0B5), minorit (;0%05 b(t not significant statisticall ) an' Comm(nist "art membershi* (P0%05.) a**ear reasonable% 0% H/am*les of Hrrors in Official 1ata &n this section & *rovi'e e/am*les of inacc(rate official statistics, some 'iscovere' !hile 'oing econometric anal sis of the Chinese econom % Girst, on the n(mber of *ersons in the labor force, China Statistical Yearbook 1)), gives (in 4able 0;2 on *% A0) the n(mber of em*lo e' *ersons (in $0,000 *ersons) as 50..0 in $ABB, 55.2A in $ABA, 5.A0A in $AA0 an' 50>AA in $AA$% 4he increase from $ABA to $AA0 is obvio(sl too large to be believable% &f !e e/amine the em*lo ment 'ata in China Statistical Yearbook 1))4 (*% B5) !e fin' 55.2A for $ABA, 55>00 for $AA0 an' 5B.50 for $AA$ !ith no obvio(s brea: in the 'ata% Since the State Statistics C(rea( ma'e a ma3or revision in the collection of 'ata, the 3(m* in the revise' 'ata (es*eciall in the com*onent for *rimar in'(str ) ma occ(r beca(se of the 'ifference in coverage or metho' of collection, b(t no e/*lanation of the 3(m* is given in the $AA> Yearbook+ &f the revise' 'ata are correct, then the 'ata for $ABA an' before have to be in error% As a secon' e/am*le, Cho! an' Shen (2005) in e/amining the 'ata on non;government e/*en'it(res for e'(cation *oint o(t that (n'erestimation has res(lte' from the fail(re to incl('e contrib(tions from overseas Chinese, es*eciall those living in 7ong Oong% 4his concl(sion is base' on the first a(thor2s :no!le'ge of s*ecific large items that are

$2

e/cl('e'% 4he (n'erestimation is '(e to the lac: of coverage b the re*orting (nits in the 1e*artment of H'(cation !hich *rovi'es the 'ata in the Yearbook+ 4he 1e*artment of H'(cation 'oes not re)(ire e'(cational instit(tions to re*ort contrib(tions from overseas Chinese as non;government e/*en'it(res on e'(cation% Ner s(bstantial amo(nts from overseas Chinese contrib(te' for the constr(ction school b(il'ings, man name' after the 'onor, an' for visiting fac(lt members at (niversities an' for teachers in lo!er level e'(cational instit(tions are not re*orte' as a *art of non;government e/*en'it(res on e'(cation% As a 'efense for the official 'ata, it ma be sai' that non;government e'(cation s*en'ing as *rovi'e' b the Chinese National C(rea( of Statistics covers onl s*en'ing b Chinese nationals or instit(tions, an' e/cl('es s*en'ing b overseas Chinese% #n'er this inter*retation there is no error< onl the 'efinition of s*en'ing is more restricte'% 4he thir' is concerne' !ith statistical 'iscre*ancies in 'ata on cons(m*tion% Statistical 'iscre*ancies almost al!a s e/ist !hen t!o 'ifferent so(rces are em*lo e' to meas(re the same *henomenon% A stan'ar' case is in the meas(rement of national income from final e/*en'it(res an' from *a ments to factors of *ro'(ction% Ginal e/*en'it(res consist of cons(m*tion, investment, government e/*en'it(res, e/*orts min(s im*orts% "a ments to factors incl('e !ages, rents, *rofits an' interests% 4he t!o metho's iel' 'ifferent res(lts, creating a statistical 'iscre*anc % A statistical 'iscre*anc can be fo(n' !hen cons(m*tion is constr(cte' for China2s national income acco(nt !hich is *artl base' on retail sales 'ata as com*are' !ith s(rve s of (rban an' r(ral ho(sehol's% "er ca*ita cons(m*tion base' on the national income acco(nt (N&A) can be m(ch larger than that base' on sam*le s(rve s, both re*orte' in the Statistical Yearbook+ Gor e/am*le, (sing China Statistical Yearbook 1)), on 'ata for $AA5, N&A gives cons(m*tion of resi'ence (e/cl('ing government cons(m*tion) as .25BA ($0,000 (an) on *% 25, an' *o*(lation as $22.BA ($0,000 *ersons) on *% 5A, iel'ing *er ca*ita cons(m*tion of 255. (an *er *erson% 4he S(rve 'ata give (rban cons(m*tion *er ca*ita as .A$A%5 (an on *% 2A0 an' r(ral cons(m*tion *er ca*ita as $5>2%$ (an on *% .$5% Since the fractions of (rban an' r(ral *o*(lation in $AA5 are res*ectivel 0%2A.> an' 0%>05. (on *% 5A), *er ca*ita cons(m*tion as a !eighte' mean is 2252, !hich is onl B0%A0 *ercent of the above N&A

$.

estimate% & o!e this 'iscover to 7ol8 (2000) !ho *oints o(t that the val(e of commo'it cons(m*tion from N&A e/cee's those base' the s(rve s s(bstantiall for man given in his 4able 0% Cons(m*tion re*orte' in the national income acco(nt is larger than cons(m*tion obtaine' from sam*le s(rve s *artl beca(se it has a broa'er coverage% &t incl('es cons(m*tion of goo's an' services *rovi'e' b the (nits in !hich the cons(mers !or: an' not *ai' for b the cons(mers themselves (s(ch as *a ment in :in' an' *ossibl me'ical e/*enses an' schooling for the chil'ren), home *ro'(ction b the cons(mers, im*licit rent of their ho(sing (nits, an' all other goo's an' services not *ai' for% Cons(m*tion as re*orte' in sam*le s(rve s incl('es onl goo's an' services *ai' for b the ho(sehol's themselves% Allo!ing for s(ch 'ifferences in coverage one ma still fin' it 'iffic(lt to e/*lain the 'ifference b a factor of 0%B5 as given above% 7ol8 (2000) tries to reconcile the 'ifferences bet!een the t!o sets of 'ata an' cannot e/*lain the large 'ifferences% 5% Official Hstimate of the Rate of G1" Gro!th A n(mber of st('ies have been *(blishe' !hich are critical of *artic(lar 'ata *(blishe' in the China Statistical Yearbook% See for e/am*le the ten *a*ers on 'ifferent as*ects of Chinese economic statistics *(blishe' in China $cono%ic (e ie-, vol% $2, No% 0 (200$) e'ite' b 4% G% Ra!s:i an' K% Qiao% 4here are also the o**osite vie!*oints of -a'ison ($AAB) an' Carsten (2000b) concerning the *ossible overestimation of economic gro!th b Chinese official statistics% &t is not the *(r*ose of this *a*er to revie! the *oints of each of these articles an' other relate' articles in the literat(re% & !ill confine m 'isc(ssion to certain 'iverse o*inions of the rate of gro!th of real o(t*(t in China% 4he rate of gro!th of G1" as estimate' b official 'ata is 'isc(sse' b Ra!s:i (200$) an' Olein an' O8m(c(r (2002L200.)% 4he former is critical an' latter is s(**ortive of the official estimate% Ra!s:i (200$, 4able $) cites 'ata on energ (se, (rban formal em*lo ment an' cons(mer *rice in'e/ !hich gre! m(ch more slo!l than the rate of ears as

$0

gro!th of G1" in the ears $AAB;200$ to arg(e for the overestimation of G1" b official 'ata% 7ol8 (200.) raises 'o(bt abo(t the above arg(ment for 'ata inacc(rac % Olein an' O8m(c(r (2002L200.) (se a more com*rehensive set of $5 relate' time series an' regress the rate of gro!th of G1" on fo(r *rinci*al com*onents (linear combinations that are m(t(all (ncorrelate') e/tracte' from the rates of change of these $5 series, an' fin' the relation to be close an' the regression coefficients to be reasonable% 4he $5 series are electricit (:!h), coal (tons), oil (tons), steel (tons), freight (tonR:m), civil aviation (tonR:m), long 'istance tele*hone calls, em*lo ment share of tertiar sector, gain o(t*(t, e/*orts (const% S), im*orts (const% S), government s*en'ing ('eflate'), real !age, inflation rate (c*i) an' livestoc: *ro'(cts (tons)% 4he sam*le *erio' is from $AB0 to 2000% Olein an' O8m(c(r a**ear to be more convincing than Ra!s:i beca(se the relate' series (se' are more com*rehensive an' the sam*le *erio' is longer% Ra!s:i (200$) cites cas(al evi'ence from statements of Chinese economists an' even "remier Ih( Rong8i abo(t *ossible 'ata falsification from *olitical *ress(re, b(t also *oints o(t that the National Statistics C(rea( has trie' to correct the *ossible over; or (n'er;re*orting of Chinese o(t*(t 'ata% &t is interesting to observe that the official gro!th rates for 2002, 200. an' 2000 remain as high as B%0, A%5 an' A%. res*ectivel !hile the Chinese government o*enl claime' that the econom !as overheating in 200. an' 2000 an' trie' to (se macro;control *olicies to slo! it 'o!n% &f the National Statistics C(rea( follo!s *olitical !in's, ho! co(l' its estimates for G1" gro!th be as high as re*orte' in 200. an' 2000? &f the rate of gro!th of real G1" in $AAA;200$ ha' been as lo! as Ra!s:i (200$) s(ggests, ho! co(l' economic gro!th be increase' s(''enl to s(ch high rates in the follo!ing fe! ears? &f the official gro!th rates of 2002;2000 are also overestimates ho! can s(ch overestimates of gro!th be maintaine' for a si/ ear *erio' !itho(t ma:ing the estimate of level in 2000 loo: ver (nreasonable, given the initial estimate of real G1" in $AAB? Fo(ng (200.) also claims that the official estimate of the ann(al rate of gro!th of real G1" an' of in'(strial o(t*(t from $A>B to $AAB !as abo(t t!o *ercentage *oint too high% Grom China Statistical Yearbook 1))), 4able $.;$2, & have fo(n' 'ata on o(t*(t of

$5

2. *ro'(cts, incl('ing (a) A cons(mer non;'(rables (chemical fiber, arn, cloth, sil:, *a*er an' *a*er boar's, s(gar, vegetable oil, beer an' cigarettes), (b) 5 cons(mer '(rables (refrigerators, electric fans, ho(sehol' !ashing machines, color television sets an' cameras), (c) B cons(mer an' *ro'(cer goo's (electricit , h 'ro*o!er, steal *ro'(cts, cement, *late glass, *lastics, motor vehicles an' tr(c:s) an' (') constr(ction, all in *h sical (nits% #sing the o(t*(ts of gro(* (a) an' (b) combine', !eighte' b their *rices in $AB> (as fo(n' in China Co%%odity "rices Statistical Yearbook 1)*), **% $>5; 5, s(**lemente' b **% $>2;0), iel's an e/*onential gro!th rate of 0%0A$2A< gro(* (c) *rovi'es a mean gro!th rate of 0%0A.55 an' constr(ction (') gre! in terms of com*lete' floor s*ace at a rate of 0%$0.50% Since (') is $2%. *ercent of in'(strial o(t*(t, !e ta:e a !eighte' mean of the above three gro!th rates !ith the res*ective !eights of %0.B5, % 0.B5 an' %$2.% 4he res(lt is 0%0A0 as com*are' !ith the official gro!th rate of 0%$$2 for in'(strial o(t*(t% 4here are t!o so(rces of 'o!n!ar' bias in m estimation of the gro!th rate of 0%0A0 for in'(strial o(t*(t% Girst is the (se of $AB> *rices rather than *rices of earlier ears as (se' in the official in'e/, beca(se earlier *rices !o(l' give larger !eights to cons(mer '(rables !hich have gro!n more ra*i'l % Secon', an' more im*ortantl , the metho' ignores the intro'(ction of man ne! *ro'(cts '(ring the t!ent ; ear *erio' s(ch as com*(ters !hich have gro!n ra*i'l % Allo!ing for these t!o so(rces of (n'erestimation !o(l' raise o(r estimate of 0%0A0 easil to 0%$$2 an' contra'icts the claim of Fo(ng that the official gro!th rate of 0%$$2 is an overestimate b abo(t 2 *ercentage *oint% Fo(ng2s main *oint is that if !e 'eflate nominal o(t*(t b its im*licit 'eflator to obtain real o(t*(t, the estimate' increase in real o(t*(t is too large beca(se the 'eflator (n'erestimates the tr(e inflation rate% C re*lacing the o(t*(t 'eflator b another official *rice in'e/ for each of the three sectors as given in his 4able . ((sing the farm an' si'eline *ro'(cts *(rchasing *rice in'e/ for the *rimar sector, (sing the e/;factor in'(strial *rice in'e/ for the secon'ar sector an' (sing the service *rice com*onent of the cons(mer *rice in'e/ for the tertiar sector), the official gro!th rates of real G1" an' of the its non;agric(lt(ral com*onents from $A>B to $AAB !ere re'(ce' res*ectivel from

$5

%0A$ an' %$05 to %0>0 an' %0B$% 4he ann(al gro!th rates of real G1" accor'ing to the CSY estimate an' alternative estimate are given in Gig(re 2 of Fo(ng (200.)% 4he most 'ramatic 'ifference bet!een the official an' Fo(ng2s estimates of G1" gro!th occ(rs in $ABA !hen the latter estimate sho!s a negative 5%2 *ercent an' the former sho!s a *ositive 0 *ercent% 4he negative gro!th is attrib(te' (*% $2.2) to +the forces that *reci*itate' the *olitical (nrest of that ear%, 4his estimate 'oes not seem *la(sible for at least t!o reasons% Girst, there !as no sign of significant economic 'isr(*tion in the first five months of the ear% "eacef(l 'emonstrations 'i' not start (ntil A*ril an' the 4iananmen &nci'ent occ(rre' on J(ne 0, $ABA% Accor'ing to CSY China2s real G1" !as gro!ing at $$%. *ercent in $ABB an' a re'(ction to the official rate of 0%$ *ercent in $ABA !as a ver large re'(ction% Ke can reasonabl ass(me that for the first si/ months of $ABA, real G1" !as increasing at least at > *ercent ann(all as com*are' !ith $$%. *ercent the ear before% 4o get a negative gro!th of ;5%2 *ercent for the entire ear !o(l' re)(ire an ann(al rate of 'ecline in o(t*(t of ;$>%0 *ercent (?>;$>%0@L2T;5%2) in the secon' half of $ABA, !hich is highl (nli:el % Hven if !e acce*t the a'3(ste' rate of gro!th of 5%. *ercent *rovi'e' b Fo(ng for $ABB (as rea' from his Gig(re 2) an' ass(me a 0 *ercent ann(al gro!th in the first half of $ABA, to arrive at a negative gro!th of ;5%2 *ercent for the entire ear !o(l' re)(ire an ann(al rate of 'ecline of ;$0%0 *ercent in the secon' half of $ABA, !hich is also highl (nli:el % Secon', to *rovi'e 'irect evi'ence of *ositive gro!th of in'(strial o(t*(t an' constr(ction, & have com*(te' the ratios of o(t*(ts in $ABA to o(t*(ts in $ABB for the same list of 2. *ro'(cts that !ere (se' in com*(ting the above in'(strial o(t*(t in'e/% 4he ratios are res*ectivel (a) $%$.A, $%020, $%00>, $%025, $%050, $%0B>, $%0.$, 0%AB0, $%0.2 (b) 0%BB5, $%$$0, 0%>BA, 0%A05, 0%>B5, (c) $%0>., $%0B., $%0.5, $%00$, $%$5B, $%0B$, 0%A05, 0%A0$ an' (') $%0.5% As in section && & estimate the combine' gro!th rate for gro(*s (a) an' (b) b the ratio of the total val(e of the $$ *ro'(cts (omitting three *ro'(cts lac:ing in *rice 'ata) in $ABA to the total val(e in $ABB, both eval(ate' at the $AB> *rices given earlier% 4he res*ective val(es are $5>%5> billion an' $55%0> billion, giving a gro!th rate of $%0$.% 4his gro!th rate for gro(*s (a) an' (b) combine', the mean

$>

gro!th rate of $%0.0 for the thir' gro(* (c) an' the rate $%0.5 for constr(ction (!hich acco(nte' for $2%. *ercent of the secon'ar in'(str in $ABB as sho!n in 4able 2 belo!) are consistent !ith the re*orte' *ositive gro!th rate of 0%00 for G1" given b CSY+ 4he strongl contra'ict the claim of a negative rate of gro!th of G1" b as m(ch as ;5%2 *ercent accor'ing to the a'3(ste' estimate of Fo(ng% Cho! (2000) attem*te' to re*ro'(ce the estimates of real G1" for $ABB an' $ABA b the metho' of Fo(ng an' to *in*oint !here the might lea' to inacc(rate res(lts% 4able $ s(mmari8es the 'ata an' the re*ro'(ction% ?&nsert 4able $%@ 4able $ O(t*(ts an' their Rates of Change in $ABB an' $ABA b Fo(ng2s -etho' G1" $ABB Nominal val(e $ABA Nominal val(e "rice in'e/ ($ABBT$%0) O(t*(t in $ABB *rices O(t*(t Change,$ABBT$ Notes9 1ata on nominal o(t*(ts are fo(n' in CSY 1)), (4able 2;A)% "rice in'e/ for *rimar in'(str is *(rchasing *rice in'e/ for farm *ro'(cts ($A>BT$00) given in CSY 1)), (4able B;$$) converte' to ($ABBT$%0)% "rice in'e/ for secon'ar in'(str is e/; factor *rice in'e/ of in'(strial *ro'(cts given in CSY 1)), (4able B;$2)% "rice in'e/ for tertiar in'(str is the *rice in'e/ of the service com*onent of the cons(mer *rice in'e/ (CSY 1))0, 4able >;$>)% $ABA O(t*(t in $ABB *rices for each of the three com*onents of $0$>.%> 0%A0A05 $0A2B%. $5A0A%2 "rimar .B.$%0 022B%0 $%$50$ .5>5%2 0%A5A5A Secon'ar 55B>%2 >2>B%0 $%$B5 5$.5%5 0%A.$5A Constr(ction 4ertiar B$0%0 >A0%0 $%$B5 55A%5 0%B2550 05$0%$ 500.%2 $%2.A 0.50%A 0%A55A2

$B

G1" is obtaine' b 'eflating nominal o(t*(t b the corres*on'ing *rice in'e/% G1" in $ABB *rices is the s(m of the above three com*onents% 4he res(lting 5%$5 *ercent 'ecline in real G1" is ma'e (* of a 'ecline of 0%$0 *ercent in the *rimar in'(str , 5%B0 *ercent in the secon'ar in'(str an' .%.$ *ercent in the tertiar in'(str % & have *ointe' o(t in the last *aragra*h that a negative gro!th of 5%B0 *ercent for secon'ar in'(str is a ver (nreasonable estimate% G(rthermore, if !e 'eflate the nominal val(e of constr(ction >A0%0 in $ABA b the e/;factor in'(strial *rice in'e/ of $%$B5 ($ABBT$%0) to obtain its val(e 55A%5 in $ABB *rices, !e obtain a rate of change of $;0%B255 T;0%$>.5 for constr(ction as given b Fo(ng2s metho'% 4his allege' negative $> *ercent rate of 'ecline in constr(ction is highl inconsistent !ith the re*orte' rate of increase in com*lete' floor s*ace b .%5 *ercent% 4he calc(lation for the gro!th rate in $ABA *in*oints one s*ecific large error res(lting from (sing Fo(ng2s metho'% 4herefore the metho' of Fo(ng (200.) for estimating the rate of change of real o(t*(t can be ver (nreliable% &n fact the large 'iscre*anc bet!een Fo(ng2s estimate of negative 5%2 *ercent an' the official estimate of *ositive 0 *ercent for the ear $ABA alone contrib(tes to almost half a *ercentage *oint in the 'ifference bet!een the t!o estimates of the average ann(al gro!th rate for the entire sam*le *erio' $A>B;$AAB% 5% Concl(sion Altho(gh Chinese official 'ata have been !i'el (se' for economic research *(blishe' in referee' 3o(rnals, there are still critics !ho claim that the 'ata ma be falsifie' for *olitical *(r*oses% 4his *a*er *oints o(t that staff members of the Chinese National Statistical C(rea( in Cei3ing an' in its *rovincial an' cit offices are obligate' b la! to *rovi'e acc(rate statistics, that the statistics are (se' for national economic *lanning as re*orte' b the "remier to the National "eo*le2s Congress an' rea' b observers all over the !orl', that it is 'iffic(lt to falsif national o(t*(t an' other statistics for a long *erio' an' that even in selecte' ears bet!een $AA5 an' 2005 official ann(al G1" gro!th rates a**ear reasonable% &t reaches the concl(sion that the official 'ata are b an' large reliable, grante' (navoi'able errors in certain cases, b 'ra!ing from the a(thor2s o!n

$A

e/*erience in (sing them for man economic st('ies !here 'ata acc(rac an' the confirmation of !ell;establishe' economic h *otheses reinforce each other% &t e/amines certain critics of official estimates of o(t*(t gro!th rates an' e/*oses the errors in the alternative estimates% Nee'less to sa , an serio(s scholar (sing the Chinese official 'ata, as in (sing an other 'ata, !o(l' nee' to e/ercise ca(tion in his research even if the 'ata are not *(r*osel falsifie'% Ac:no!le'gement9 4he a(thor !o(l' li:e to than: Carsten 7ol8 an' three anon mo(s referees for val(able comments on an earlier 'raft of this *a*er an' the Gregor C Cho! Hconometric Research "rogram of "rinceton #niversit for research s(**ort% References Cho!, Gregor C% +A mo'el of national income 'etermination in China,, .ournal of "olitical $cono%y, A. ($AB$), >B2;>A2% Cho!, Gregor C% /he Chinese $cono%y% Ne! For:9 7ar*er an' Ro!, $AB5% Cho!, Gregor C% +Chinese Statistics%, /he 0%erican Statistician% 00 ($AB5)9 $A$;$A5% Cho!, Gregor C% +-one an' *rice 'etermination in China,, .ournal of Co%&arati e $cono%ics, $$ ($AB>), .$A;...% Cho!, Gregor C% +Ca*ital formation an' economic gro!th in China,, 1uarterly .ournal of $cono%ics, $0B ($AA.)9 B0A;B02% Cho!, Gregor C% China's $cono%ic /ransfor%ation+ O/for'9 Clac:!ell "(blishing, 2002% Cho!, Gregor C% 2no-in3 China+ Singa*ore9 Korl' Scientific "(blishing Co%, 2000%

20

Cho!, Gregor C% an' O!an, F% O% +Hconomic effects of *olitical movements in China9 lo!er bo(n' estimates%, "acific $cono%ic (e ie-, vol% $ ($AA5), Cho!, Gregor C% an' Shen, Fan% +-one , *rice level an' o(t*(t in the Chinese macro; econom ,, "rinceton #niversit , Center for Hconomic "olic St('ies, 2000% Cho!, Gregor C% an' Shen, Fan% +1eman' for e'(cation in China,, "rinceton #niversit , mimeo, 2005% Grie'man, -ilton% 4oney 4ischiefs% Ne! For:9 7arco(rt Crace U Com*an , $AA0% 7all, Robert H% +Stochastic im*lications of the life c cle;*ermanent income h *othesis9 theor an' statistical evi'ence,, .ournal of "olitical $cono%y, B5 (1ecember $A>B)9 A>$; B>% 7ol8, Carsten A%, +Gast, clear an' acc(rate9 ho! reliable are Chinese o(t*(t an' economic gro!th statistics,, China 1uarterly+ No% $>. (200.), ??? 7ol8, Carsten A%, +1econstr(cting China2s G1" statistics,, China $cono%ic (e ie-% Nol% $5, no% 29 $50;202, 2000% a 7ol8, Carsten A%, +China2s reform *erio' economic gro!th9 !h Ang(s -a''ison got it !rong an' !hat that means,, 7ong Oong #niversit of Science an' 4echnolog , 1e*artment of Social Science !or:ing *a*er, 1ecember 2000% b 7ol8, Carsten A%, +OHC1 M China Governance "ro3ect9 4he &nstit(tional Arrangements for the "ro'(ction of Statistics,, O$CD Statistics 5orkin3 "a&ers, 2005L$, OHC1 "(blishing, 2005% Johnson, Hmil N% an' Cho!, Gregor % +Rates of ret(rn to schooling in China,, "acific $cono%ic (e ie-, Nol+ 2, no% 2 ($AA>), $0$;$$.%

2$

Olein, Da!rence R% an' S% O8m(c(r, +4he estimation of China2s economic gro!th rate%, .ournal of $cono%ic and Social 4easure%ent, 2B (2002L200.), $B>;202% O!an, F% O% an' Cho!, Gregor C% +Hstimating economic effects of *olitical movements in China,, .ournal of Co%&arati e $cono%ics, Nol% 2. ($AA5), **% $A2;20B% -a''ison, Ang(s% Chinese $cono%ic "erfor%ance in the 6on3 (un+ "aris9 1evelo*ment Centre of the Organi8ation of Hconomic Co;o*eration an' 1evelo*ment, $AAB% -an:i!, N% Gregor , 1avi' Romer an' Cavi' N% Keil, +A contrib(tion to the em*irics of economic gro!th,, 1uarterly .ournal of $cono%ics, CN&& ($AA2), 00>;.B% -incer, Jacob% Schoolin3, $7&erience and $arnin3s+ Ne! For:9 Col(mbia #niversit "ress, $A>0% "eo*le2s Re*(blic of China% State Statistical C(rea(% China Statistical Yearbook+ Cei3ing9 China Statis% "(b% 7o(se, ann(al iss(es% "eo*le2s Re*(blic of China% State Statistical C(rea(% China Co%%odity "rices Statistical Yearbook (in Chinese, Ihongg(o K(3ia 4ong3i Nian3ian)% Cei3ing9 China Statis% "(b% 7o(se, ann(al iss(es% Ra!s:i, 4% G% +Khat is ha**ening to China2s G1" statistics?, China $cono%ic (e ie-, vol+ $2, no% 09 .0>;.50, 200$% Ra!s:i, 4% G% an' K% Qiao (g(est e'itors), +Ro(n'table on Chinese Hconomic Statistics9 &ntro'(ction,, China $cono%ic (e ie-, vol+ $2, no% 09 2AB;.02, 200$% Re*(blic of China% Statistical Yearbook of the (e&ublic of China+ 4ai*ei9 1irectorate; General of C('get, Acco(nting an' Statistics, ann(al iss(es%

22

Fo(ng, Al! n, +Gol' into Case -etals9 "ro'(ctivit Gro!th in the "eo*le2s Re*(blic of China '(ring the Reform "erio',, .+"+$+ $$$ (1ecember 200.)9 $220;$25$%

2.