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China’s GDP Statistics Questioned

Posted by Author on August 8, 2009

By Si Yang, Voice of America, via The Epochtimes,  Aug 7, 2009 –

After the Gross Domestic Product (GDP) reports for the first half of 2009 from various local areas in China were published, the sum was found to exceed China’s national GDP statistic by 1.4 trillion yuan (approximately U.S.$205 billion). Some economists commented that China’s GDP figure could only be used as a “reference.”

In mid-July, the Chinese National Bureau of Statistics announced China’s GDP for the first half of 2009 to be 13.98 trillion yuan (approximately US$2.045 trillion). Meanwhile, the Hong Kong Apple Daily reported the sum of the GDP figures for the first half of the year from 31 provinces and autonomous regions reached 15.38 trillion yuan (approximately U.S.$2.25 trillion). This 1.4 trillion yuan difference is a 10 per cent inflation of the national data.

The Apple Daily’s editorial article entitled, “Who Made the 1.4 Trillion-Yuan Mistake?” commented that the Chinese central government-ordered mandate to “ensure economic growth” under the economic crisis has led to adulteration of the data in local areas to ensure their performance will look good.

The report summarized the main causes of the problem: the over-emphasis of the GDP growth rate in the assessment and the lack of an effective monitoring mechanism. Therefore, the central government is responsible for the false data.

Hu Xingdou, economist and professor at the Beijing Institute of Technology, indicated in an interview with Voice of America that local officials are very likely to produce false and concealed data to achieve so-called “performance.”

He said, “There is no penalty for reporting false information under the current system. The policy of pursuing GDP growth at all costs is bound to encourage local officials at all levels to produce false GDP figures.”

Zhong Dajun, the founder of the Beijing Dajun Economic Observer Center said, “It is clear that the GDP alone does not correspond to the well-being of China’s economy. Investment in useless construction might pull up the GDP figure, but does not improve the livelihood of the public. In this case, no one cares about the GDP.”

The Apple Daily editorial also commented that the central government’s fear that the real data might upset the stock market and thus, social stability has also caused officials to turn a blind eye to the false data put out by the local areas.

Zhong agreed to this theory, “because stock stability does rely on the GDP.”

However, he added, “The number is only a reference for the economist.” He suggested that the Chinese as well as the international community not over emphasize the GDP figure.

Zhong Dajun said, “Economists don’t judge the economy merely based on numbers. The Chinese economists are getting used to this (false data). No one will take it seriously as something concrete. It’s only a reference.”

The EPochtimes

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