Deciphering Chinese Economic Statistics


Deciphering Chinese Economic Statistics

I was looking this week at the Chinese government’s (National Bureau of Statistics) data on income and consumption for 2014 and comparing the current data to historic figures.

At the aggregate level, in China overall, there appears to be a headline fall in savings rate (income less consumption) from 31% to 27% between 2013 and 2014. This is relevant as savings rates have risen each year since 2005, and this would break the trend.

My next step was to look at urban savings separately from rural savings. Urban incomes appear to have risen 7% in 2014, expenditures to have risen a little faster, so the savings rate fell from 33% to 31%. Nothing in that to contradict what I hear and see in the economy.

That meant rural citizens were the main source of the lower national savings rate. And indeed, the statistics report that the rural savings rate fell from 26% in 2013 to 15% in 2014 on the back of a 27% increase in consumption (versus a 12% increase in 2013). I didn’t see what would have caused this, nor do I see signs that consumer goods companies are suddenly selling a lot more in rural areas.

Was the number right before? Is the number right now? Or is there really a discontinuity in rural consumption?

We asked NBS for an explanation, which they were very willing to provide (and I give them credit for their openness). The answer we received was that the NBS expanded the coverage of their rural survey in 2014, and that the (higher) 2014 data is not comparable to prior years. Which leads to the question of which survey is more accurate – the former survey with lower incomes and higher savings? Or the 2014 survey with higher incomes and much lower savings. Or neither of them?

And why, if the survey’s coverage was expanding, was it finding wealthier rural areas that it missed before to investigate. It would perhaps be easier to understand if they were adding more remote and poorer areas.

One thing is for sure: Don’t draw any trend charts including 2014 rural income or consumption.

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Image: Ken Teegardin / Flickr

By |February 2, 2015|Categories: Gordon's View|1 Comment

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  1. […] Gordon Orr at McKinsey China was also puzzled by the consumption data and not only stumbled upon the source of consumption growth but uncovered very large data gathering change by the CNBS.  Looking at the data he noticed that urban consumption growth slightly outpaced income growth but not enough to be responsible for the required consumption growth.  However, when examining  rural consumption growth he noted that official YoY consumption grew at 27%.  Let me repeat that: according to the China National Bureau of Statistics rural consumption grew 27% from between 2013 and 2014. […]

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