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China’s Stats Bureau Explains the Great GDP / Energy Consumption Puzzle
China’s GDP figures have perplexed commentators for years, particularly in light of their strange relationship with energy consumption. In late 2008, some analysts pointed to a huge drop in energy consumption as a clear sign that GDP growth had hit a wall and hailed it as a proxy indicator more reliable than government announcements which at the time trumpeted lower, but not insubstantial, growth.
To address some of the derision surrounding GDP calculations, China’s National Bureau of Statistics issued a report on August 3 attempting to explain the paradox. According to them, energy use figures have contradicted GDP stats because of three key factors: the economy has shifted away from energy-intensive industry, citizens are using energy more efficiently and because there is no direct relationship between GDP growth and energy use.
The explanation throws some much-needed light on a very contentious issue and suggests that some very real changes have emerged in China’s economy in recent years. How far this will go to silence the armies of naysayers who regularly deride China’s statistical releases remains to be seen; the reasoning, after all, comes from a state-run body which conveniently affirms that the Chinese government’s policy goals of building a more efficient and less-energy intensive economy are being met.
However, the claims seem to stand up to independent scrutiny as Tao Wang, economist at UBS, has backed them up with her own research. Perhaps this is one debate about China’s GDP figures that can now be laid to rest.
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Spencer Sheehan edits sector research.
