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Mirror of true growth?

Updated: Aug 21,2014 4:55 PM     China Daily

GDP number is important, but not as much as many people think. In many countries, including China, that figure can be easily inflated for various reasons to the tune that national GDP doesn’t equal the totaled number of all provinces. Premier Li once said that he measures economic performance through rail freight, power consumption and loans - indicators that actually have nothing to do with the GDP figure but mirror true economic activities.

GDP cannot gauge such aspects as the quality of economic growth, public services, people’s well-being, total national wealth, environment, etc. Therefore, a high GDP growth rate doesn’t necessarily mean a strong economy or a high quality of life.

So, whatever you spend, produce or sell is taken into consideration while calculating the national GDP that in turn reveals whether the country’s economic health is improving or going down and that helps the government decide policies and allocate resources. That’s the role of the GDP.