GDP Data Still Raises Questions About How To Solve This Problem.

China's GDP deflator is not a precise indicator of domestic output prices.

When import prices rise, it exaggerates inflation, and vice versa underestimates inflation.

Data released by the National Bureau of Statistics today show that China's economy rose 6.9% in the three quarter, the lowest growth rate since the first quarter of 2009.

However, 6.9% of the economic growth rate is still higher than analysts' expectations.

Some investors remain skeptical of the data.

Asian stocks rose collectively after China's GDP data were released today.

However, the stock market in Korea, Japan and Hongkong and Singapore's stock market went up in the morning and fell.

At the close, the Shanghai Composite Index also fell, dropping 0.14%.

Angus Nicholson, an analyst at IG Group, a bond investment firm, said: "the growth of GDP 6.9% in the third quarter has raised doubts about the authenticity of the data in the second quarter and the third quarter.

Considering the other data released today, it is hard to make people feel optimistic about GDP data.

"In the context of a significant slowdown in fixed asset investment and industrial output data in September, GDP is far more unexpected than expected," policy researchers at NSBO, a research firm in Beijing, told Reuters.

Capital Economics economist Julian Evans-Pritchard pointed out in the report that the economic growth rate has been greatly exaggerated.

He said the continued stability of official GDP data will further increase doubts about its credibility.

The shortcomings in the calculation of GDP deflator, plus the political pressure to achieve economic growth goals, slowed down the official GDP in the three quarter, slower than the level shown in the third party data.

Wall Street knowledge website has mentioned that Capital Economics economist Chang Liu believes that China's economic data are distorted, mainly due to problems in the way of production, rather than being deliberately misled.

China's economic growth has been overestimated by 1 to 2 percentage points by the authorities because of errors.

If corrected, China's GDP growth will be between 5% and 6% at the end of the first quarter of the first quarter.

The key problem lies in the "GDP deflator".

The GDP deflator is the ratio of nominal GDP to real GDP, which is used to pform nominal GDP into channel.

Adjust the actual GDP.

This index is better than CPI.

Such indicators are more widely used and are therefore considered as more useful indicators for measuring the price pressures of a country.

The Fed likes it very much.

Since GDP is a measure of domestic output, it reflects only the prices of domestic goods and services.

In practice, this means that the GDP deflator should be deducted from import prices, which is a convention in countries with a robust statistical system.

In many cases, not doing so will not have much impact.

However, when import price inflation changes faster than domestic inflation, for example, the volatility of international commodity prices will show its influence.

However, because China does not deduct the change of import prices when calculating the deflator of most industries, its deflator is more closely related to PPI.