China today dismissed reports that it’s 7 per cent GDP growth for the second quarter was an inflated data to conceal slowdown in the world’s second largest economy, saying the “misunderstanding” might have been caused by different methods of calculations.
The stronger-than-expected GDP figures released yesterday have raised speculation that China has inflated the data, state-run Global Times reported.
Last month, the Financial Times published an article which said falling prices in China helped mask a significantly worse economic slowdown than official figures suggest.
Denying any attempts to conceal the slowdown, Sheng Laiyuan, spokesman of the National Bureau of Statistics (NBS) said different methods for calculating GDP adopted by China caused the misunderstanding.
“China’s GDP figures were not overestimated, and they reflect actual conditions,” the paper quoted him as saying.
The GDP figures announced by the NBS also remained unchanged from the first three months of the year, which was the lowest since 2009 when it fell to 6.6 per cent.
China’s economy, a key driver of world growth, expanded 7.4 per cent last year, slower than the 7.7 per cent in 2013.
The 7 per cent GDP in the second quarter which is the target announced by Premier Li Keqiang came as a surprise in the backdrop of recent stock market crash and steady projections of downturn of the world’s second largest economy.
Last week the International Monetary Fund (IMF) had maintained its forecast of 6.8 per cent GDP growth for China.
The better-than-expected GDP figures however failed to buoy mainland stock markets, which slipped yesterday.
The Chinese stock market is just recovering from a USD 3.2 trillion crash few weeks ago and Beijing has rolled out a series of stimulus measures to boost investor confidence.
China’s central bank has cut interest rates four times since November last year.
Sheng said a string of government measures has had a positive effect on the bourses, and the government is capable of preventing regional or systematic risks and ensuring the stable development of both the stock markets and the economy.
Sheng told media yesterday that the economy’s improvement had been “hard-won,” given the slow recovery in the global economy and huge downward domestic pressure.
“The better-than-expected economic performance was mainly due to the robust growth of the services industry, the recovery in home sales and stronger export growth,” Xu Hongcai, an economist at the China Center for International Economic Exchanges said.
These measures included several cuts in both benchmark interest rates and banks’ reserve requirement in the first half of the year, accelerated spending on infrastructure projects, and support policies to encourage mass entrepreneurship and innovation, he said.