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How do we know the real size of China's GDP?

Posted by xiaophil December 29, 2009 in the Group I Have a Question.

Tags: Chinese economy, Chinese GDP

As a person who really knows nothing about such matters, I'm wondering if any fellow poddies can tell me if experts can really know how big the GDP of China is?  Yes, I have read that there are different ways of measuring GDP, but that isn't what I'm getting at.  I assume that no matter what method is used in measuring GDP, the result is only as good as the quality of input data.  These 5 points are what have been ping-ponging in my head lately:

  1. Sometimes I think the Chinese economy is much more massive than it already is because I often see people not reporting money.  It is very normal.  From what I hear, this goes on at all levels of business.
  2. Sometimes I think that it is much smaller because China isn't known for transparency, and so I figure the government exaggerates figures to get face and make its population happy.
  3. Sometimes I think it is a combination of 1 and 2 and the end result is the two factors somewhat cancel each other out.
  4. Sometimes I think maybe the economists' calculation methods have a way around 3 and 4.
  5. Or none of the above.

Can anyone give any insight?  Sadly, I might not be able to get online much today, but I will check in if I can.

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