Financial Times: Report casts doubt over Chinese data

Financial Times: Report casts doubt over Chinese data

By James Kynge in Beijing

Published: February 27 2002

An internal investigation by the Chinese statistics authority has uncovered endemic fabrication of official statistics, hardening doubts over the credibility of national growth figures and applying pressure on economists to reappraise the way they judge China's economic performance.

Officers of the National Bureau of Statistics (NBS) uncovered at least 60,000 violations of China's statistics law during an investigation that lasted from May to October last year, according to an official at the NBS. About 20,000 of these violations were pursued through the legal system and some Rmb30m ($3.6m, £2,5m) in fines has been collected so far.

Although relatively modest in scale, the survey nevertheless represented the most damning official indictment yet of abuse within the statistical system. "If our law-enforcing bodies had been stronger and with better financial support, we could have found out more [irregularities]," Xiong Zhennan, director of the NBS policy and regulations department, told the FT.

Mr Xiong insisted that despite the widespread inflation of growth figures by local officials keen to boost their careers, China's headline gross domestic product statistics were completely accurate. He declined to give details on how the NBS was able to make this judgement.

Observers said the NBS revelations would harden doubts over the accuracy of Chinese GDP statistics and prompt multilateral organisations, governments and brokerage-house analysts to review their often uncritical acceptance of the figures.

The Asian Development Bank (ADB), which represents official statistics as fact in several reports, was considering adding caveats to its publications. "I think that is a problem that we should be looking at. A bit of a health warning in some of the briefings wouldn't hurt," said Bruce Murray, resident representative of the ADB in Beijing.

Mr Murray said the "health warning" might note that there were errors and uncertainties in the reporting of Chinese figures. But, he added, the ADB would be less comfortable estimating whether GDP was actually higher or lower than the officially published figure.

Others had no such qualms. Albert Keidel, who worked at the World Bank in Beijing for most of the 1990s, said in a recent private report for the China Economic Quarterly: "It is virtually certain that official growth data overstate actual growth by varying degrees and that the overstatement became more serious in the later 1990s."