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Tuesday, 30 December 2008
Call to Rein in GDP Data Exaggerations
Mainland legislators are calling on Beijing to stop provincial governments compiling their own economic statistics, to clamp down on the doctoring of gross domestic product data.
Mainland legislators are calling on Beijing to stop provincial governments compiling their own economic statistics, to clamp down on the doctoring of gross domestic product data.
According to The Beijing News, Wu Xiaoling, a member of the Standing Committee of the National People’s Congress, said it was almost impossible to form an accurate picture of the nation’s economic output because of a number of technical barriers and the tendency of lower-level authorities to flaunt their administrative performance through inflated GDP figures.
For at least the past decade, almost all provincial governments have published their own GDP figures. But the combined totals often exceeded national figures, indicating the provincial data was inflated. Ms. Wu said that although accurately calculating a national economy’s exports was technically possible, doing the same for each province was not.
At an NPC session last week to review changes to the statistics law, Ms. Wu said that because resources and investment usually flowed freely between provinces, it was not possible to calculate accurately how much each province had produced.
The report said it was highly likely that provincial governments were doubling up or overlapping in their calculations. Last year and in 2006, total GDP - the sum of each province’s economic output - was trillions of yuan higher than the central government’s tally. The GDP growth rates reported by the lower-level governments were more than 10 percentage points higher than the central government figures.
Ms. Wu said provincial government officials instinctively inflated GDP figures to bolster their standings as capable administrators and their promotion prospects.
Han Meng , an economist at the Chinese Academy of Social Sciences, said: “This is actually a systematic political phenomenon rather than a sporadic event.
“Just imagine it: when the central government declares that the first priority of the country is to deliver fast economic growth, who would dare to lag behind?”
In his testimony to last week’s NPC session, National Bureau of Statistics chief Ma Jiantang proposed revisions to the statistics law to make it more effective.
The proposed changes include firewalls to prevent lower-level governments tampering with statistics, consolidation of GDP data collection and publication in the hands of the central government, and higher fines and tougher penalties.
But analysts said the mainland’s highly centralised political system also needed an overhaul.
“As long as the political regime is highly centralised, we can hardly expect any comprehensive improvement in the situation,” Professor Han said.
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Call to Rein in GDP Data Exaggerations
Woods Lee
30 December 2008
Mainland legislators are calling on Beijing to stop provincial governments compiling their own economic statistics, to clamp down on the doctoring of gross domestic product data.
According to The Beijing News, Wu Xiaoling, a member of the Standing Committee of the National People’s Congress, said it was almost impossible to form an accurate picture of the nation’s economic output because of a number of technical barriers and the tendency of lower-level authorities to flaunt their administrative performance through inflated GDP figures.
For at least the past decade, almost all provincial governments have published their own GDP figures. But the combined totals often exceeded national figures, indicating the provincial data was inflated. Ms. Wu said that although accurately calculating a national economy’s exports was technically possible, doing the same for each province was not.
At an NPC session last week to review changes to the statistics law, Ms. Wu said that because resources and investment usually flowed freely between provinces, it was not possible to calculate accurately how much each province had produced.
The report said it was highly likely that provincial governments were doubling up or overlapping in their calculations. Last year and in 2006, total GDP - the sum of each province’s economic output - was trillions of yuan higher than the central government’s tally. The GDP growth rates reported by the lower-level governments were more than 10 percentage points higher than the central government figures.
Ms. Wu said provincial government officials instinctively inflated GDP figures to bolster their standings as capable administrators and their promotion prospects.
Han Meng , an economist at the Chinese Academy of Social Sciences, said: “This is actually a systematic political phenomenon rather than a sporadic event.
“Just imagine it: when the central government declares that the first priority of the country is to deliver fast economic growth, who would dare to lag behind?”
In his testimony to last week’s NPC session, National Bureau of Statistics chief Ma Jiantang proposed revisions to the statistics law to make it more effective.
The proposed changes include firewalls to prevent lower-level governments tampering with statistics, consolidation of GDP data collection and publication in the hands of the central government, and higher fines and tougher penalties.
But analysts said the mainland’s highly centralised political system also needed an overhaul.
“As long as the political regime is highly centralised, we can hardly expect any comprehensive improvement in the situation,” Professor Han said.
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