WSJ reports:

How high is inflation in China? Some suspect it is higher than is captured in the official consumer price index.A new measure developed by e-commerce giant Alibaba Group Holding Ltd. seems to give that idea some credibility. The official CPI puts inflation at 2.4% year-on-year in April. Alibaba’s Internet Shopping Price Index – based on transactions on the firm’s Taobao and Tmall websites – puts it at 6.9%.

After an article in The Wall Street Journal drew attention to the discrepancy, China’s National Bureau of Statistics went into action. They pored over the description of the Alibaba index (in Chinese), and dispatched researchers to Hangzhou to interview its creators.

Read more: http://blogs.wsj.com/chinarealtime/2013/05/20/inflation-deflated-evaluating-the-alibaba-index/