Matthews Asia: What To Trust? Measuring The Chinese Economy

What To Trust? Measuring The Chinese Economy by Andy Rothman, Matthews Asia

A question that is posed frequently by those skeptical over the health of Chinese economy is: “If electricity consumption and rail freight traffic are both weak, how can GDP be expanding by more than 6%?” This is a great question because the answer highlights the dramatic pace of change in the structure of Chinese economy. In today’s Sinology, we explore the reasons why the so-called “Li Keqiang Index” is a poor way to assess China’s growth, and offer some better metrics.

The structure of Chinese economy has changed so much over the past decade that we need to change the way we measure its growth. Services and...