China's Economy Could be $1tr Smaller

China's economy could be smaller than it says it is.  $1tr smaller.

Christopher Balding, a professor at Peking University, lays out the case in a new working paper that finds some very strange patterns in China’s official statistics, which have long been viewed with skepticism. He believes the government manipulated housing price data between 2000 and 2011 to produce lower inflation results. Balding makes four key observations:

Of course, the Chinese fudging numbers to save face isn't a shocking new tactic by the government, but cooking the books to add an extra trillion dollars is kinda ballsy.

Or, if you don’t believe him [the report's author], prepare yourself to believe this fact from China’s national statisticians: From 2003 to 2011, the only consumer prices that rose in China were for food, which made up 99% of the official increase in consumer prices.

The worrying state of Chinese finances gives anyone pause for thought, but officials are keen to reassure us all that Chinese debt is completely manageable, even if you do live in Jiangsu.

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