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China's official data lack credibility because of the NBS's questionable statistical methods, including cherry-picking what data to publish. Its Q3 GDP release brought back concerns about accuracy and manipulation.
THREAD...
@ATFinancial_ @ChinaBeigeBook https://www.asiatimesfinancial.com/why-china-s-official-data-don-t-add-up
THREAD...
@ATFinancial_ @ChinaBeigeBook https://www.asiatimesfinancial.com/why-china-s-official-data-don-t-add-up
2/x: Revisions to China's fixed asset investment data for September 2019 was a real head-turner. The revised numbers depressed last Sep’s FAI by 2.8 trillion yuan, boosting 2020’s growth figures as well as the Q3 GDP.
See @nickm4rro's graphic for more. https://twitter.com/nickm4rro/status/1318222658052317186?s=20
See @nickm4rro's graphic for more. https://twitter.com/nickm4rro/status/1318222658052317186?s=20
3/x: NBS explained away the change in a short footnote, stating that historical data were adjusted on the basis of the “fourth national economic census unit inventory.”
http://www.stats.gov.cn/english/PressRelease/202010/t20201020_1794931.html
http://www.stats.gov.cn/english/PressRelease/202010/t20201020_1794931.html
4/x: In August, China had reported its first positive retail sales growth of 2020 on the basis of a similar adjustment, which depressed year-ago figures by 50 billion yuan.
IOW Retail Sales had actually contracted in Aug too -- making it 8 straight months of a retail downturn.
IOW Retail Sales had actually contracted in Aug too -- making it 8 straight months of a retail downturn.
5/x: Core statistical problem: sample’s changing characteristics & size. NBS only surveys firms that hit a min. annual revenue. If a firm falls below that threshold its dropped from future surveys & its results wiped from past data.
6/x: Alternatively, if the number of firms meeting the revenue threshold rises in a given year, the sample then becomes larger than last year’s by thousands of firms.
The following @SCMPNews piece posted by @gabewildau explains this in more detail. https://twitter.com/gabewildau/status/1318398055771758594?s=20
The following @SCMPNews piece posted by @gabewildau explains this in more detail. https://twitter.com/gabewildau/status/1318398055771758594?s=20
7/x: This cherry-picking approach can produce trillions of yuan worth of adjustments. It invalidates any claims of representative sampling. Furthermore, it creates a constant stream of revisions to official statistics without details on methods or the release of underlying data.
8/x: The more fundamental challenge all this underscores is that investors cannot rely on official data to reliably capture economic conditions, especially when the economy is under pressure.
9/x: We created @ChinaBeigeBook as a check on behind-the-curtain machinations common in NBS data. Our Q3 stats, gathered in real-time say GDP growth is nowhere near official figures: all sectors are contracting YoY, interior provinces are in recession, & consumption is lagging.
10/10: With its revisions to 2019 data 
is setting the stage to claim full year GDP growth in 2020. This despite many official data 
this yr. With the political goal of claiming victory over Covid & the recession taking priority don't bet on murky official stats adding up.
is setting the stage to claim full year GDP growth in 2020. This despite many official data this yr. With the political goal of claiming victory over Covid & the recession taking priority don't bet on murky official stats adding up.
