The Audacity of Chinese Inflation Data
It is frequently difficult to grasp for many people just how invented most Chinese economic and financial data actually is. In my paper, How Badly Flawed is Chinese Economic Data? The Opening Bid is $1 Trillion I present some of the many ways. Let me give you one example in the bar graph below.
Each year represents the amount that food price inflation contributed to the overall consumer price index. For example, in 2003 if we use the official weight for food prices, food price inflation would have been responsible for 100% of consumer price inflation.
In the 9 years presented, there are only two years where food price inflation represents less than 70% of total inflation. If you add this up over the years, between 2003 and 2011, food price inflation was responsible for 99% of all inflation in China. Another way to think about this is that the Chinese government is claiming that no other prices rose in China between 2003 and 2011! In other words, prices in China except for food have not changed in a decade.
You be the judge.