08/06/2009, 00.00
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Chinese statistics increasingly unreliable

National and local data are often at odds, or are not transparent enough or unverifiable. In the current crisis the world wants maximum transparency.
Beijing (AsiaNews/Agencies) – In July China announced that its rate of economic growth was back to normal at around 8, a sign that its economic recovery from the global financial meltdown was well underway. However, experts have gone through the data with a fine comb and found many obvious flaws.

Recently the National Statistics Bureau put the country’s GDP figures at 13.99 trillion yuan for the first half of the year, wide off the mark compared to the output indicated by China’s local governments (municipalities and its 31 provinces), 15.38 trillion yuan.

Such a discrepancy is not even unusual since local governments in 2004 reported faster GDP growth than the national rate, according to economist Sun Mingchun.

The Chinese acknowledge that even in Mao’s times local officials could improve their career chances if they showed higher growth rates in the area under their jurisdiction. Many are in the habit of providing their bosses with higher figures, in line with what central planners forecast. The practice is so widespread that in June Beijing adopted a law that punishes public officials who provide flawed or fake data.

Experts for example are sceptical at the country's official unemployment rate, which has remained unusually stable between 3.9 and 4.3 per cent through all the domestic and international economic upheavals of the past seven years.

In the current crisis GDP figures in the world’s leading economies are watched more closely than ever before. A faster growth rate in China can have major consequences for world trade and international markets. For this reason, analysts have been extra careful in looking at China’s accounts of renewed growth.

What they found was not encouraging. They realised that, other than a broad picture, a critical analysis of China’s statistics is extremely difficult to do because the country does not provide adequate data.

One case in point: how much stimulus has Beijing’s 4 trillion yuan package aimed at reversing the economic slowdown delivered? What was its impact on the labour market? Has it been audited to see that none found its way into speculation in equities and properties or into inefficient public enterprises?

The net effect is that the lack of reliable information makes data not very useful. Another example are investments in fixed assets, which are considered deeply suspect because they are counted as having been made when the funds are disbursed, rather than when the money is actually spent. Similarly, economists have long wondered how Beijing can come up with accurate figures for GDP just two weeks after the end of each quarter, when it takes US statisticians a whole month.

Now they want China to come up with data that are accurate and verifiable if it wants to play a key role in global finance. Otherwise whatever it says will be met with greater scepticism.

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