China says provinces cook up GDP figures

Discussion in 'China' started by Sridhar, Feb 2, 2010.

  1. Sridhar

    Sridhar House keeper Moderator

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    China says provinces cook up GDP figures

    [​IMG] 01 February 2010


    [​IMG]China, which uses its GDP figures as a political tool to impress its citizens and the world at large, said over the weekend that its provincial governments may be rigging their growth statistics figures to show how capable they are of managing their local economies.
    Media commentators say, this rigging, may also have inflated the country's GDP figures.
    They also say that in the absence of independently verifiable information, it is likely that the country's production, power consumption, retail sales, unemployment rate figures, too may have been inaccuracy because of the paranoia of putting out low figures leading to loss of face for the provincial administrators.
    Speaking at a national statistics work conference in Beijing on 28 January, Ma Jiantang, commissioner of the National Bureau of Statistics (NBS) said that the nation's statistical credibility has been affected since some provincial officials inflate the GDP figures they report to the NBS.
    The China Daily online said in a report on Saturday, subsequently pulled, that the aggregate of the GDP figures reported by local governments reportedly is often larger than the overall national figure released by the NBS, which has raised concerns that the local governments may have rigged the statistics to please their bosses in Beijing.
    According to the NBS, for the first half of 2009, the GDP figures given by the provincial governments far exceeded the national GDP figure calculated by the NBS, by more than 1.4 trillion yuan, or about 10 per cent of the total GDP.

    http://www.domainb.com/economy/worldeconomy/20100201_china.html
     
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  3. amoy

    amoy Senior Member Senior Member

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    Exactly so. Many officials are simply more concerned about their seats than well-being of ordinary people. What may India offer for China to learn to get rid of such a disgusting bureaucracy?
     
    Last edited: Feb 2, 2010
  4. Daredevil

    Daredevil On Vacation! Administrator

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    Indian bureaucracy has all long been conservative in its estimates and calculation of growth. They never tried to inflate GDP figures as Indian culture is not afflicted with "loss of face" attitude that is most prevalent in China and other east asian economies. China should do thorough independent verification and audits of the local provincial government accounts. Simple as that.
     
  5. Shredder

    Shredder Regular Member

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    Exactly, Just take a look at the growth stats on this page,

    http://www.chinability.com/GDP.htm
     
  6. Rage

    Rage DFI TEAM Stars and Ambassadors

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    Nope, I don't think so. I think the "loss of face" culture is pervasive even in India, albeit to a lesser degree. In India, however, because there is no centralized command-structure issuing arbitrary extrapolation or no system akin to the 'cadre evaluation' system, that stipulates losses or benefits accruing to states on the basis of centrally-defined performance criteria, there exists no incentive / disincentive structure for local officials to engage in the apographal book-fudging.


    What may India offer in terms of a strategem "to get rid of such a disgusting bureaucracy"?

    1) In India, there exist plenty of independent watchdogs such as the Comptroller and Auditor General (the C.A.G.) that regularly bring to the fore issues of malfeasance by the government and its various agencies. While these agencies are generally hermetic to corruption, they are on the rare occasion, vulnerable to penetration by powerful vested interests.

    2) To watch the watchdogs, therefore you have a large, independent and free media. While sometimes bellicose, and more than often sensationalist, these media outlets survive to bring to the civilian realm what otherwise transpires in the dark echelons of government. Because there is such a plethora of news agencies, each one is competing with the others to get the slightest sliver of information from which can be made a news event. And because there is such a plurality of news agencies, there is rarely, if ever, the possibility of keeping what happens in the political or economic realm under wraps. The only things that remain relatively well secluded are military secrets, and even then, they are not impervious to having their malpractices exposed.

    3) Access to Information- In India, there is the Right to Information (the R.T.I.)- a Civilian Act requiring the government to reply expeditiously, within 30 days, to any request for information from a citizen of India on records by both the Central and State governments, with the exception of those that are of a 'militarily sensitive' nature. The Act works pretty well, in fact, and civilians are entitled to any piece of information from government records- including marginal notes and calculations of figures- if any. The records can then be collated against practice, and has served as a powerful tool (since it's very recent inception, in 2005) to keep government on its toes.
     
    Last edited: Feb 4, 2010
  7. LETHALFORCE

    LETHALFORCE Moderator Moderator

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    The Chinese have been lying about their economy for years to gain foreign investment, now that they have received enough investments they can reveal the truth their economy is one big lie.

    http://yglesias.thinkprogress.org/archives/2009/08/are-chinese-gdp-statistics-real.php

    Are Chinese GDP Statistics Real?

    Well, I think it’s pretty clear that in an enormous, poor, authoritarian country you’re never going to get official statistics that are quite right. But there’s been a lot of disagreement since the recession really hit about exactly how unreliable Chinese economic data is. Officially, their stimulus program is working well and though growth is well down from its peak, it’s still quite robust. But there are a lot of doubts out there, but Jamil Anderlini from the Financial Times casts some further doubt.

    The crux of the matter is that in addition to national economic statistics, China’s regions publish numbers. If you tally up the regional numbers, you basically always get a figure that’s higher than the overall national number, presumably because the leadership in each region has an incentive to fudge. And now:

    In recent years, provincial figures have suggested consistently the world’s third-largest economy is bigger than Beijing’s published estimate, but the discrepancy appears to have widened this year.

    Even state-controlled media reports and editorials have in recent days raised questions over their accuracy.

    The Global Times, controlled by the People’s Daily, the Communist party mouthpiece, reported that the public reacted with “banter and sarcasm” to NBS figures showing average urban wages in China rose 13 per cent in the first half to $2,142.

    John Makin has a helpful explanation of how China does national accounting statistics and how that interacts with the stimulus.
     
    Last edited: Feb 4, 2010

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