China's Press Doubts Official Data

China's press and the public are raising doubts about the government's claims of economic growth.
By Michael Lelyveld
2009-08-18
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BOSTON--Questions continue to mount over China's economic data as the country's press has started to poke holes in the government's latest growth claims.

On Aug. 3, the Beijing Times raised doubts about the government's statistics on economic growth for the first half of the year, noting that the total GDP for China's provinces was 1.4 trillion yuan ($205 billion) higher than the figure for the entire country.

The report adds to skepticism among some economists about the National Bureau of Statistics (NBS) report in July that China's GDP jumped by 7.1 percent in the first half of the year at a time of global recession.

It has also added confusion, since the provincial total was greater even than the 13.99 trillion yuan that the NBS claimed.

The English-language China Daily quoted one economist who blamed the discrepancy on double-counting of company subsidiaries in the provinces. But the 10-percent difference in estimates may be too large to be so easily explained.

The government has been trying to improve the accuracy of NBS estimates for years after numerous cases of cheating, often by officials to advance their careers. In June, President Hu Jintao signed revisions to the state statistics law, raising the penalties for falsifying data.

Different data

In 2006, the National Development and Reform Commission (NDRC) cited similar differences between provincial and national NBS data. It noted that the gap between the totals had steadily widened between 2000 and 2003, the official Xinhua news agency reported three years ago.

But the latest glitch comes less than two weeks after an unnamed NBS official offered a lengthy defense of the data's accuracy in China Daily, along with criticism of a Western economist who challenged it.

Last month, Derek Scissors, a research fellow at the Washington-based Heritage Foundation, wrote that it was "reasonable to simply dismiss" the NBS reports, in part because they were compiled so quickly. In its rebuttal, the NBS attacked some of Scissors' conclusions as "wrong."

But the questions raised by China's press suggest that domestic audiences are also skeptical about NBS methods.

"That's very interesting and surprising to me in the extent to which they've been willing to report it so far, especially when confidence is a big issue during an economic downturn," Scissors told Radio Free Asia. "There's certainly a credibility problem."

In the first half of the year, 13 of 27 provinces, autonomous regions, and municipalities that reported GDP by July 31 claimed double-digit growth, Xinhua said, citing the Shanghai Securities News.

Public criticism

Domestic doubts about NBS data have not been confined to the GDP figures and the Beijing Times. A series of derisive public comments followed an NBS estimate that average pre-tax per-capita wages of urban workers rose 12.9 percent in the first half of the year, according to a report by the English-language Global Times, relayed by Xinhua.

The estimate brought "a hail of criticism from the public," said the paper, an offshoot of People's Daily, published by the Communist Party of China. "The term:'I've been given a raise,' referring to the furor over the NBS's statistics, has become increasingly popular among China's mass of Internet users," Global Times said.

One online comment cited by the paper called the wage claim "miraculous," noting that it exceeds the 7.9-percent GDP growth reported for the second quarter, although "most people's pockets remain shallow."

A top NBS official conceded there are problems with the economic reporting.

"It is possible that a few provinces overstate their economic situation," said Peng Zhilong, director of the NBS national economy assessment department, writing in People's Daily.

"GDP growth has become a very important tool to evaluate the work performance of local officials in China recently, so some may inflate the number in order to get through the assessment or beautify their work report," said Peng.

Estimates 'too high'?

But questions remain about whether the central government's estimates are also too high for the same reasons. Scissors said the conflict represents a clash between traditional NBS practices and the harsh reality of economic pressures on the public.

"I think what's happened is that the state statistics bureau is going about its business the way it always has, putting out some numbers that aren't very reliable. But what's changed is that people are willing to speak out," he said.

"Now, when the official statistics tell them that everything's OK, they know it's not OK, and they're willing to complain enough that the media feels like it needs to respond, at least to some extent," Scissors said.

Doubts about the data may also extend to the NDRC's report on Aug. 2 that China improved its energy efficiency by 3.35 percent in the first half.

The measure of energy use per unit of GDP depends on the accuracy of the NBS economic estimates. China has cited its efficiency improvements in negotiating a new treaty to limit greenhouse gas emissions.

When asked whether developed nations should accept the validity of China's reports in negotiating the treaty, Scissors said, "Absolutely not."

"If there's not a global monitoring system that's accepted as part of climate negotiations, they're worthless," he said. "There has to be a global monitoring system, and it has to be done independently of the Chinese government."

Despite the GDP growth estimates, China's media continue to cite negative data on performance in the first half.

On Aug. 10, China Daily reported that net profits of 362 listed companies dropped nearly 20 percent during the period. On the same day, the paper also said that central government tax revenue fell nearly six percent in the first half from a year before.

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