Monday, December 26, 2011

Another Way Chinese GDP is Distorted Upward

From the comments, Shevtar writes:
Some detail on how the private companies in China are also engaged in balloning the GDP. I recently imported from China goods for 4300 USD and then found out that my Chinese supplier declared in his export declaration 10.300 This amount will go in the official Chinese statistics and here in this small example we see the export encrease more than twice. And I am sure that many Chinese companies engage in such things as there is a clear motive - they can increase their VAT reimbursement in such a way. On the other hand I am sure that it is not unique to China, in any country that has VAT some companies will be doing similar things.


  1. Excellent point! I have never considered this.

  2. In Latvia, it goes on all the time. Well-connected people get money from the state for free this way.