Li Keqiang on GDP (Man-Made Growth)
TL;DR
Li Keqiang famously viewed official GDP figures as "man-made" and primarily for reference, preferring alternative metrics.
Key Points
He stated in 2007 that GDP figures are "man-made" and unreliable, according to a released diplomatic cable.
His skepticism inspired the creation of the Li Keqiang Index, which weighs bank loans, electricity consumption, and rail freight.
He implicitly favored more granular, physical indicators over the official statistic when seeking a better read on economic activity.
Summary
Li Keqiang maintained a position of deep skepticism regarding China's official Gross Domestic Product (GDP) statistics. He is widely known for remarks made to a U.S. diplomat in 2007 where he characterized the official GDP figures as being “man-made,” and therefore unreliable. This sentiment led to the creation of the Li Keqiang Index, an alternative measure that tracks electricity consumption, bank loans, and rail freight, which is considered by some observers to provide a more volatile and perhaps truer reflection of underlying economic activity than the official number. His perspective acknowledges the political nature of the official reporting mechanism.
His stance implies that while GDP growth targets are set and closely watched as a barometer of Beijing's control, they cease to be effective measures once they become explicit annual targets. The official growth rate, which China is unique in setting annually, is seen as potentially distorted by the administrative goal itself. Therefore, he implicitly supported the use of alternative indicators that capture real-world physical activity—like electricity usage and freight volume—over the headline figure when assessing the actual pace of the economy.
Key Quotes
GDP figures are 'man-made' and therefore unreliable
Frequently Asked Questions
Li Keqiang's position was marked by deep skepticism; he famously described official GDP figures as "man-made" and suggested they should only be used "for reference only." He implied that setting a specific annual growth rate made the measure less reliable as an economic barometer.
He suggested looking at a combination of electricity production, railway freight volume, and outstanding bank loans to gauge economic activity more accurately. This set of indicators later became known as the Li Keqiang Index.
The sources indicate a consistent historical stance where Li Keqiang questioned the reliability of official GDP statistics dating back to at least 2007. There is no evidence suggesting his fundamental distrust of the politically targeted number has evolved.
Sources5
China's GDP number is a fiction, but a symbolic one
China's Li Keqiang Index
On the Reliability of Chinese Output Figures
Economic Watch: Key indicators show China's economic recovery is gathering speed : r/Economics
Beyond GDP: Do Electricity, Freight and Credit Tell the Real Story of Tanzania's Economy?
* This is not an exhaustive list of sources.