China's official gross domestic product (GDP) data remains a reliable indicator of the country's economic growth and captures the overall economy very well, a U.S. Federal Reserve researcher said Monday.
Jun Nie, a senior economist with the Federal Reserve Bank of Kansas City, said he constructed an alternative measure of China's real GDP growth. "Our measure aligns well with (China's) official GDP figures, indicating official GDP figures remain a useful and valid measure of Chinese economic growth," he said in a research note.
The alternative model built by Nie uses a series of sectoral data that capture the strength of key sectors of the Chinese economy from the fourth quarter of 2008 to the fourth quarter of 2014. It captures the variations in Chinese GDP growth fairly well and could explain about 99 percent of Chinese economic growth during this period, Nie said.
However, the model generates a growth rate slightly below the official GDP figure for 2015. Nie said the gap between the two measures appeared to largely reflect the contribution of a stock market rally to economic growth, a development that wasn't captured in his model.
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