China’s National Bureau of Statistics is starting to release its economic data on a comparative quarter-by-quarter basis, which is the method most countries have long employed. This gives a more accurate assessment of economic trends. Judging by this the new quarter-by-quarter analysis, China’s recently released first quarter growth rates may be less dramatic than it seems. From the Wall Street Journal:
The headline figure when China on Friday reported its economic data for the first quarter of this year was the 9.7% growth rate in gross domestic product. That figure, as with all of China’s quarterly GDP numbers in the past, compared output in the report period with output in the same three months of last year.
But the National Bureau of Statistics on Friday also published, for the first time, data on how economic output compared with the previous quarter. This quarter-on-quarter number, which is adjusted to account for seasonal differences and multiplied to give an “annualized” rate, is how the U.S. and most other major economies report their quarterly GDP data. By this measure, the statistics bureau said, GDP in the first quarter grew 2.1%, or 8.4% on an annualized basis—significantly slower than the year-on-year figure—suggesting the current momentum of the world’s second-largest economy is markedly slower than the year-on-year figure indicates.
However, these new figures are not accompanied by historical data, which may still make them less effective than they could be. From Wall Street Journal:
Economists who watch China generally agree that the issuance of quarter-on-quarter data represents progress. But the progress is limited, because the statistics bureau failed to publish any historical data for the quarterly measure—which is important for understanding where the current number fits into past trends. Arthur Kroeber, managing director of Beijing-based research firm Dragonomics, said “the revisions aim to create a series that has a closer relation to reality, but the failure of the NBS to produce comparable historical data, or to clearly explain their methodology, detract from progress that is made.”
The statistics bureau didn’t explain the lack of historical data. Analysts said the omission likely arose at least partly because historical data would reveal a much sharper slowdown in the economy during the recent global recession than the government has ever acknowledged—particularly in the fourth quarter of 2008.