In a recently published research paper by Professor Luis Martinez from the University of Chicago. He has looked at satellite data from 1992 to 2008. Compared their announced GDP numbers with the growth of night lights seen from space.
The idea behind this is that numbers can be fudged, especially when it comes to autocratic states who control all the instances that repost and check the numbers. But what cant be fudged is independently verifiable data. Such as the night lights or the electricity used.
Using that data he managed to see in this period that the autocratic countries on average reported 35% higher GDP than the night lights supported.
The Youtube channel Money & Macro then took these numbers and took China into the present day. And what they find then is the size of China’s economy, while still the second largest. Is vastly smaller than the official numbers. In fact, it is 60% smaller than reported.
And why does this matter? Well, for starters the financial trouble China is in at the current moment, with their building bubble on the verge of bursting. And their banks have nationwide problems. These problems just got larger. Because if China’s GDP is much smaller that means its ability to handle the financial and economical blowback of these is severely weaker than anticipated.
