What is GDP in China
The biggest problem with China’s GDP, argues Michael Pettis, is that China’s reported GDP is an input into the economic system, not a measured output. To make China’s GDP figures comparable to those of other countries, the input numbers would have to be adjusted with some relevant output, such as the amount of bad debt that should be written down in a given time period. If this amount were subtracted from China’s nominal GDP growth rate, the resulting adjusted growth rate probably would be about half than what is currently reported.
Almost everyone is complaining bitterly about terribly difficult conditions, rising bankruptcies, a collapsing stock market, and dashed expectations. In my eighteen years in China, I have never seen this level of financial worry and unhappiness.
What Is GDP in China?
By: Michael Pettis – Peking University
The end of China’s exceptionalism
One way or another, China’s continued defiance of the “laws” of macroeconomics, geopolitics, and economic development will hasten its inevitable return to normalcy. When that happens, the world had better brace itself.
The Coming China Shock
By: Arvind Subramanian, Josh Felman
