Page 6 - THE SOUTH CHINA BUSINESS JOURNAL
P. 6
NA BRIEFING South China Business Journal
Why
People Don’t Trust
China’s Official
Statistics
Recently, several media sources reported that Liaon- cent growth in each of the first three quarters, and 6.8 percent
ing province had been fabricating its economic data from in the last.
2011 to 2014. As reported by the state-run People’s Daily news-
paper, city- and county-level governments altered economic In comparison, India’s 2016 GDP growth, while potent, had far
data, including exaggerating their fiscal revenues by at least 20 more fluctuations. It grew by 7.9 percent in Q1, 7.1 percent in Q2,
percent. Previously, the official news agency Xinhua reported 7.4 percent in Q3, and seven percent in Q4.
that one county in Liaoning had overstated its fiscal revenues by
an enormous 127 percent in 2013, among other incidents. Ultimately, questions over the veracity of China’s economic data
persist due to the lack of transparency in the collection process.
The case of Liaoning gives legitimacy to longstanding suspicions The speed with which statistics are released would not cause
of data manipulation and methodological inadequacies distort- such suspicion if there were greater openness about how the
ing China’s real economic performance. Making sense of China’s data is collected and the different components that form the fi-
economic data thus poses challenges for foreign investors, who nal numbers.
invariably need accurate statistics to make informed business
decisions. The methodology China uses to calculate its economic data is
opaque, and some even accuse the government of abruptly
Data Manipulation changing methods without announcement to distort figures and
hide declines. Further, China’s statistics laws bar on-the-ground
Sceptics of China’s national growth figures point to the speed and surveys unless permission is expressly granted by the govern-
uniformity of data. China releases its economic data faster than ment, thereby limiting the ability of third parties to measure
almost any other country despite being the most populous in the economic activity.
world. Quarterly GDP figures are released just 12 days after the
end of the quarter, and are usually leaked even earlier. In con- Gauging China’s Economic Indicators
trast, the US takes four weeks to release its data.
Given the perceived inadequacy of Chinese statistics – whether
Quarterly GDP growth figures are strikingly consistent with due to fears of manipulation or simply substandard quality –sev-
previously announced growth targets. For example, in 2016 the eral banks and economists have formulated alternatives to of-
government targeted 6.5-7 percent growth, and quarterly growth ficial measures.
was remarkably consistent. The government reported 6.7 per-
4
Why
People Don’t Trust
China’s Official
Statistics
Recently, several media sources reported that Liaon- cent growth in each of the first three quarters, and 6.8 percent
ing province had been fabricating its economic data from in the last.
2011 to 2014. As reported by the state-run People’s Daily news-
paper, city- and county-level governments altered economic In comparison, India’s 2016 GDP growth, while potent, had far
data, including exaggerating their fiscal revenues by at least 20 more fluctuations. It grew by 7.9 percent in Q1, 7.1 percent in Q2,
percent. Previously, the official news agency Xinhua reported 7.4 percent in Q3, and seven percent in Q4.
that one county in Liaoning had overstated its fiscal revenues by
an enormous 127 percent in 2013, among other incidents. Ultimately, questions over the veracity of China’s economic data
persist due to the lack of transparency in the collection process.
The case of Liaoning gives legitimacy to longstanding suspicions The speed with which statistics are released would not cause
of data manipulation and methodological inadequacies distort- such suspicion if there were greater openness about how the
ing China’s real economic performance. Making sense of China’s data is collected and the different components that form the fi-
economic data thus poses challenges for foreign investors, who nal numbers.
invariably need accurate statistics to make informed business
decisions. The methodology China uses to calculate its economic data is
opaque, and some even accuse the government of abruptly
Data Manipulation changing methods without announcement to distort figures and
hide declines. Further, China’s statistics laws bar on-the-ground
Sceptics of China’s national growth figures point to the speed and surveys unless permission is expressly granted by the govern-
uniformity of data. China releases its economic data faster than ment, thereby limiting the ability of third parties to measure
almost any other country despite being the most populous in the economic activity.
world. Quarterly GDP figures are released just 12 days after the
end of the quarter, and are usually leaked even earlier. In con- Gauging China’s Economic Indicators
trast, the US takes four weeks to release its data.
Given the perceived inadequacy of Chinese statistics – whether
Quarterly GDP growth figures are strikingly consistent with due to fears of manipulation or simply substandard quality –sev-
previously announced growth targets. For example, in 2016 the eral banks and economists have formulated alternatives to of-
government targeted 6.5-7 percent growth, and quarterly growth ficial measures.
was remarkably consistent. The government reported 6.7 per-
4
