The excellent Christopher Balding has the scoop:
Baseline Chinese economic data is unreliable. Taking published National Bureau of Statistics China data on the components of consumer price inflation, I attempt to reconcile the official data to third party data. Three problems are apparent in official NBSC data on inflation. First, the base data on housing price inflation is manipulated. According to the NBSC, urban private housing occupants enjoyed a total price increase of only 6% between 2000 and 2011. Second, while renters faced cumulative price increases in excess of 50% during the same period, the NBSC classifies most Chinese households has private housing occupants making them subject to the significantly lower inflation rate. Third, despite beginning in the year 2000 with nearly two-thirds of Chinese households in rural areas, the NSBC applies a straight 80/20 urban/rural private housing weighting throughout our time sample. This further skews the accuracy of the final data. To correct for these manipulative practices, I use third party and related NBSC data to better estimate the change in consumer prices in China between 2000 and 2011. I find that using conservative assumptions about price increases the annual CPI in China by approximately 1%. This reduces real Chinese GDP by 8-12% or more than $1 trillion in PPP terms.
If you would like to hear what is wrong encapsulated in a nutshell, try this:
According to [official] NBSC data, the food component of the CPI in China as responsible for 99% of inflation between 2003 and 2011. Thinking of this another way, this implies that the NBSC is claiming that the only prices to rise in china between 2003 and 2011 were food prices.