China Admits 2016 GDP Was "Miscalculated" After "Routine Vertification"

Some readers may be shocked to learn that China, that paragon of central-planning credibility and virtuous data reporting, was cooking its books. Again.

According to SCMP, China’s economic figures for 2016 were revised lower by 54.2 billion yuan (US$8.34 billion) to 74.36 trillion yuan following a "miscalculation" revealed after a routine verification of the numbers, the National Statistics Bureau said on Friday.

While the amendment was not large enough to affect the earlier reported year-on-year growth rate of 6.7% for the world’s second-largest economy, the bureau said in a statement, the truth is that nobody knows - and certainly nobody can verify - any numbers coming out of China where there already are glaring discrepancies between GDP data reported at the province and national levels.

The revision was necessary because of earlier miscalculations across various sectors, the NSB added. More from SCMP:

In the financial sector, for instance, output had been overestimated by 101.1 billion yuan, while in the telecoms and software industry, the figures were 92.9 billion yuan higher then they should have been, the statement said.

At the same time, performance was underestimated in other sectors, including construction, retail and entertainment, with the combined total for “other services” adding 139.4 billion yuan to the bottom line.

A similar revision took place one year earlier, when China’s final figure for its 2015 GDP, released in early 2017, was 354.6 billion yuan higher than its initial estimate, while 12 months earlier the final figure for 2014 was revised down 22.9 billion yuan.

Don't worry though, China is "on it": Beijing is in the process of updating its statistics methods to better represent its vast and quickly changing economy, especially with regards to how provincial figures are calculated by local authorities with vested interests.

The statistics bureau is expected to publish its initial full-year figures for 2017 on January 18. In the first three quarters of the year, GDP rose by 6.9 per cent year on year to 59.33 trillion yuan. Since all Chinese numbers are goalseeked and have little reflection of the underlying reality, we expect that numbers will come precisely in-line.