The Keqiang Index: A New Benchmark for China’s Development

This paper presents a new index, ‘the Keqiang index’, to quantify measure and monitor the progress towards the objectives of China’s development. This index is based on a set of relevant, credible and easy to monitor indicators, including industrial electricity usage, volume of railway freight and medium- and long-term loans. The internal analysis of the Keqiang index indicates that these three sub-indices of the Keqiang index can reflect the Chinese economic situation more clearly and more suitably than GDP. In addition, the external analysis of the index indicates that it can be a valid measure to judge the macro-economic situation because the Keqiang index is more sensitive to the market environment and more volatile than GDP. In summary, the Keqiang index conveys a positive signal to us, and it should come as a relief to all of those who doubt China’s economic statistics. Thus, when considering and deciding upon major matters relating to the structure of the economy or the business cycle, policymakers can quickly grasp the economic trends and make reasonable predictions of economic operations from a more unique and professional perspective.