GETTING TO GRIPS WITH CHINA’S GDP DATA

Tom Orlik

China’s gross domestic product (GDP) data is big news. The size and growth rate of GDP is the most comprehensive indicator of the strength and momentum of the economy. It is eagerly watched by investors as a guide to where to put their money. For many in New York, London, and Hong Kong, GDP growth averaging almost 10% a year for the last 30 years has been the only thing they needed to know about the Chinese economy.

The breakdown of GDP by sector output, expenditure, and region is a tool for policymakers thinking about the sustainability of China’s growth. An increasing role for investment and a shrinking share of household consumption in China’s GDP is one of the numbers that rings alarm bells ...