How economists have underestimated Chinese consumption

“Consumption is thegdp sole end and purpose of all production,” Adam Smith pointed out. But his “perfectly self-evident” maxim has never held much sway in China. Earlier this year the country’s statisticians revealed that household consumption accounted for only 37% of China’s in 2022, its lowest level since 2014.Although removing should have helped lift that figure a bit, tweaks to Chinese data could lift it rather more. China’s headline statistics may understate household income and consumption. Look closer, and both appear higher than reported—and both have risen faster.