How to fudge data - China style

Discussion in 'China' started by trackwhack, Apr 9, 2012.

  1. trackwhack

    trackwhack Tihar Jail Banned

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    The Official Chinese PMI for March was 53.1. HSBC on the other hand said - 48.3. An article with a subtle conclusion.


    China’s economic direction puzzles investors


    http://www.ft.com/intl/cms/s/0/f90783f6-821a-11e1-9242-00144feab49a.html
     
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  3. Armand2REP

    Armand2REP CHINI EXPERT Veteran Member

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    If you look on the doom and gloom thread, you will see all three factors are getting worse.
     
  4. huaxia rox

    huaxia rox Senior Member Senior Member

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    i cant believe FT would ever rasie a question like that....chinas PMI is centered at state owned and some very big companies while HSBCs samples r mainly export orieanted companies and some private owned companies which may suffer more becoz of the EU dept crisis.....anyway i think the 2 r both reflecting different aepects of prcs economy at the same time....
     
  5. Yusuf

    Yusuf GUARDIAN Administrator

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    China falsifying economic statistics to disguise true depth of troubles: Economists

    HONG KONG: As the Chinese economy continues to sputter, prominent corporate executives in China and Western economists say there is evidence that local and provincial officials are falsifying economic statistics to disguise the true depth of the troubles.

    Record-setting mountains of excess coal have accumulated at the country's biggest storage areas because power plants are burning less coal in the face of tumbling electricity demand. But local and provincial government officials have forced plant managers not to report to Beijing the full extent of the slowdown, power sector executives said.

    Electricity production and consumption have been considered a telltale sign of a wide variety of economic activity. They are widely viewed by foreign investors and even some Chinese officials as the gold standard for measuring what is really happening in the country's economy, because the gathering and reporting of data in China is not considered as reliable as it is in many countries.

    Indeed, officials in some cities and provinces are also overstating economic output, corporate revenue, corporate profits and tax receipts, the corporate executives and economists said. The officials do so by urging businesses to keep separate sets of books, showing improving business results and tax payments that do not exist.

    The executives and economists roughly estimated that the effect of the inaccurate statistics was to falsely inflate a variety of economic indicators by 1 or 2 percentage points. That may be enough to make very bad economic news look merely bad. The executives and economists requested anonymity for fear of jeopardizing their relationship with the Chinese authorities, on whom they depend for data and business deals.

    The National Bureau of Statistics, the government agency in Beijing that compiles most of the country's economic statistics, denied that economic data had been overstated."This is not rooted in evidence," an agency spokeswoman said.

    Some still express confidence in the official statistics. Mark Mobius, the executive chairman of Templeton Emerging Markets Group, cited the reported electricity figures when he expressed skepticism that the Chinese economy had real difficulties. "I don't think the economic activity is that bad - just look at the electricity production," he said.

    But an economist with ties to the agency said that officials had begun making inquiries after detecting signs that electricity numbers may have been overstated.

    Questions about the quality and accuracy of Chinese economic data are longstanding, but the concerns now being raised are unusual. This year is the first time since 1989 that a sharp economic slowdown has coincided with the once-a-decade changeover in the country's top leadership.

    Officials at all levels of government are under pressure to report good economic results to Beijing as they wait for promotions, demotions and transfers to cascade down from Beijing. So narrower and seemingly more obscure measures of economic activity are being falsified, according to the executives and economists.

    "The government officials don't want to see the negative," so they tell power managers to report usage declines as zero change, said a chief executive in the power sector.

    Another top corporate executive in China with access to electricity grid data from two provinces in east-central China that are centers of heavy industry, Shandong and Jiangsu, said that electricity consumption in both provinces had dropped more than 10 percent in May from a year earlier. Electricity consumption has also fallen in parts of western China. Yet, the economist with ties to the statistical agency said that cities and provinces across the country had reported flat or only slightly rising electricity consumption.

    Rohan Kendall, senior analyst for Asian coal at Wood Mackenzie, the global energy consulting firm, said coal stockpiled at Qinhuangdao port reached 9.5 million tons this month, as coal arrives on trains faster than needed by power plants in southern China. That surpasses the previous record of 9.3 million tons, set in November 2008, near the bottom of the global financial downturn.

    The next three largest coal storage areas in China - in Tianjin, Caofeidian and Lianyungang - are also at record levels, an executive in China said.

    Many Chinese economic indicators already show a slowdown this spring, with fixed-asset investment growing at its weakest pace in May since 2001. The annual growth rate for industrial production has edged below 10 percent, while electricity generation was up only 3.2 percent in May from a year earlier and up only 1.5 per cent in April.

    The question is whether the actual slowdown is even worse. Skewed government data would help explain why prices for commodities like oil, coal and copper fell heavily this spring even though official Chinese statistics show a more modest deceleration in economic activity.

    Manipulation of official statistics would also provide a clue why some wholesalers of consumer goods and construction materials say sales are now as dismal as in early 2009.

    Keeping accurate statistics for internal use by policy makers while releasing less grim figures to the public and financial markets may also help explain why China's central bank suddenly and unexpectedly cut interest rates earlier this month.

    Studies by Goldman Sachs and other institutions over the years have strongly suggested that Chinese statisticians smooth out the quarterly growth figures, underreporting growth during boom years and overstating growth during economic downturns.

    And Chinese officials have raised questions in the past about the reliability of Chinese economic statistics. An American diplomatic cable released by WikiLeaks shows that Li Keqiang, widely expected to become premier of China this autumn, said in 2007 that he regarded China's broad measures of economic growth as " 'man-made' and therefore unreliable."

    Mr. Li told an American diplomat that he looked instead to three indicators that he described as less likely to be fudged: electricity consumption, volume of rail cargo and the disbursement of bank loans.

    Jonathan Sinton, a China energy specialist at the International Energy Agency, said he had not heard of false data in China's electricity sector, and he doubted it would be feasible at the five biggest electricity generation companies that together produce half of China's electricity.

    "If there is a problem, it is going to be located in the smaller producers," he said, cautioning that even these producers would eventually have to submit accurate information to reconcile fuel, electricity and financial accounts.

    Stephen Green, a China economist at Standard Chartered Bank, said that the Chinese economy was still likely to recover this autumn as extra bank lending started to stimulate spending.

    But a survey of Chinese manufacturing purchasing managers, released on Thursday by HSBC and Markit and conducted independently of the government, gave the second-gloomiest reading for their businesses since March 2009. Only November of last year was worse, when many small and medium-size businesses faced a brief but severe credit squeeze

    http://m.timesofindia.com/PDATOI/articleshow/14358403.cms
     
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  6. Ray

    Ray The Chairman Defence Professionals Moderator

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    Re: China falsifying economic statistics to disguise true depth of troubles: Economis

    Ah well!

    China will be China.

    China shall shine, come hail, rain or high waters.
     
  7. G90

    G90 Regular Member

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    Re: China falsifying economic statistics to disguise true depth of troubles: Economis

    When could the west economists finally get tired of being alway utterly wrong on about their forecast on China economy?

    Given their track record, their forecast are even less creditable than a broken clock, ROFL
     
  8. Armand2REP

    Armand2REP CHINI EXPERT Veteran Member

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    Re: China falsifying economic statistics to disguise true depth of troubles: Economis

    China's electricity consumption is flat or negative, sounds about right to the rest of the economy based on HSBC PMI that says manufacturing is in recession...

    [​IMG]
     
  9. no smoking

    no smoking Senior Member Senior Member

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    Re: China falsifying economic statistics to disguise true depth of troubles: Economis

    There is no chance that China could come up something like "india shining".
     
  10. Armand2REP

    Armand2REP CHINI EXPERT Veteran Member

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    Re: China falsifying economic statistics to disguise true depth of troubles: Economis

    Bad Loans are Here

    [​IMG]

    :laugh::laugh::laugh:
     
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  11. Armand2REP

    Armand2REP CHINI EXPERT Veteran Member

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  12. G90

    G90 Regular Member

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    Re: China falsifying economic statistics to disguise true depth of troubles: Economis

    Am I the only guy here who find its rather entertaining and ironic when a frenchmen, who is about to join the elite group of PIGGS, jumping up and down with joy over issues like debt,or bad loan of banks :ROFL:
     
  13. no smoking

    no smoking Senior Member Senior Member

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    Re: China falsifying economic statistics to disguise true depth of troubles: Economis

    He is always like this. If you can't ignore him, then just get used to it.
     
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  14. Armand2REP

    Armand2REP CHINI EXPERT Veteran Member

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    Re: China falsifying economic statistics to disguise true depth of troubles: Economis

    Must be since France is nowhere near PIGGS with 2/3 AAA ratings and an economy out of recession.... unlike China.
     
  15. Ray

    Ray The Chairman Defence Professionals Moderator

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    Re: China falsifying economic statistics to disguise true depth of troubles: Economis

    NO they won't.

    They are not too well versed with the English Language.

     
    Last edited by a moderator: May 10, 2015
  16. Ray

    Ray The Chairman Defence Professionals Moderator

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    Re: China falsifying economic statistics to disguise true depth of troubles: Economis

     
    Last edited by a moderator: May 10, 2015
  17. huaxia rox

    huaxia rox Senior Member Senior Member

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    Re: China falsifying economic statistics to disguise true depth of troubles: Economis

    only if u care to start a thread called 'current economy of india (no 'doom' word needed coz truth iteslf carries weight)' in this forum then u can put at least 10 articles per day to show how shinning india is........
     
  18. no smoking

    no smoking Senior Member Senior Member

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    Re: China falsifying economic statistics to disguise true depth of troubles: Economis

    Well, that is the soft power of india, isn't it?
     
  19. G90

    G90 Regular Member

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    Re: China falsifying economic statistics to disguise true depth of troubles: Economis

    It takes alot of drugs to write sentence like above ROFL
     
  20. trackwhack

    trackwhack Tihar Jail Banned

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    Re: China falsifying economic statistics to disguise true depth of troubles: Economis

    Just like there is no chance that India could come up with something like "peaceful rise" ? :rolleyes:
     
  21. nimo_cn

    nimo_cn Senior Member Senior Member

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    Re: China falsifying economic statistics to disguise true depth of troubles: Economis

    Apparently, one "Doom and Gloom of China's Economy" is not enough, we definitely need more.
     
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