8/30/2017 The $13 trillion question: How fast are India and China really growing? - Jun. 8, 2016

http://money.cnn.com/2016/06/08/news/economy/india-china-economy-gdp-statistics/index.html 1/5

Growing India

The $13 trillion question: How fast are Indiaand China really growing?by Charles Riley   @CRrileyCNN

June 8, 2016: 4:39 AM ET

Powered by SmartAsset.com

In a world of slowing growth and rising uncertainty, it's tempting to take comfort in the thoughtthat Asia's giant emerging economies are still expanding at a healthy pace.

Consider the most recent GDP numbers from China and India: Beijing says its economy grew bya respectable 6.7% in the first three months of 2016, while New Delhi reported a remarkable7.9% expansion in the same period.

Don't get too comfortable, though: Both countries have been dogged by persistent doubts overthe quality of their data, leading scores of reputable economists to cast aside o�cial measuresand turn to alternative gauges instead.

Why is that important? Together, the countries accountfor 16% of world GDP, or about $13 trillion. They arebulwarks against what the World Bank describedWednesday as "insipid" global growth of 2.4% in itslatest outlook.

For India, the storm clouds began to gather in January2015 when the country's statistics bureau changed theway it calculates the size of the economy. Overnight, thepace of growth went from mediocre to eye-popping.

O�cials have defended the change, arguing that thenew method is far more rigorous, and incorporatescrucial data from the corporate sector that only recently

  

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8/30/2017 The $13 trillion question: How fast are India and China really growing? - Jun. 8, 2016

http://money.cnn.com/2016/06/08/news/economy/india-china-economy-gdp-statistics/index.html 2/5

SMARTASSET.COM

new method is far more rigorous, and incorporatescrucial data from the corporate sector that only recentlybecame available.

Related: This Indian 'buyers club' helps Americans

buy cheap drugs

Critics of the statistics agency, however, have not beenswayed. They say the new GDP numbers lack credibilitybecause they diverge so dramatically from indicatorssuch as industrial production, investment spending andexports.

When the government reported red hot growth lastweek, one persistent critic, Shilan Shah of CapitalEconomics, said plainly that the number was suspect:"There is some evidence that India's economy haspicked up speed recently but today's remarkably strongGDP data are hard to believe."

The next day, T.C.A. Anant, India's chief statistician, metwith reporters to defend the work of his numbercrunchers, while acknowledging it's not perfect.

"The question is, would you rather walk with your eyesshut or with a pair of spectacles which are very dirty?"

he asked. "The answer is often that you would wear spectacles which are dirty."

Related: India and Iran renew oil bromance in post-sanctions world

India's government statisticians win points for openly engaging with their critics. Beijing,meanwhile, has been largely silent in the face of sustained questioning.

Some economists argue that China's data is far too smooth, and almost never deviate from theCommunist Party's targets. There are also concerns over a lack of independence at thecountry's statistics agency.

The doubters often turn to proxy measures to gauge the health of China's economy. They look atelectricity output, freight shipments and seaport cargo volumes. These indicators suggest thatthe economy is growing by 4% to 5%.

That's fair enough -- even Prime Minister Li Keqiang has described o�cial economic data as"unreliable."

When Li was a provincial o�cial in 2007, he told the U.S. ambassador that o�cial GDP statisticswere "man-made" and should be used for "reference only."

CNNMoney (New Delhi)First published June 8, 2016: 1:23 AM ET

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