Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/212578 
Year of Publication: 
2006
Series/Report no.: 
BOFIT Discussion Papers No. 6/2006
Publisher: 
Bank of Finland, Institute for Economies in Transition (BOFIT), Helsinki
Abstract: 
We present a new composite leading indicator of economic activity in mainland China, estimated using a dynamic factor model.Our leading indicator is constructed from three series: exports, a real estate climate index, and the Shanghai Stock Exchange index.These series are found to share a common, unobservable element from which our indicator can be identified.This indicator is then incorporated into out-of-sample one-step-ahead forecasts of Chinese GDP growth.Recursive out-of-sample accuracy tests indicate that the smallscale factor model approach leads to a successful representation of the sample data and provides an appropriate tool for forecasting Chinese business conditions.
Subjects: 
Forecasting
China
Leading Indicator
Factor Model
Growth Cycles
JEL: 
C32
C52
E32
E37
Persistent Identifier of the first edition: 
ISBN: 
952-462-820-1
Document Type: 
Working Paper

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