Skeptical in Shanghai
Kurt Brouwer August 5th, 2009
The Financial Times has a fascinating piece on skepticism about economic statistics in China [free registration required]. As we see in the piece, many Chinese folks find government claims on wages and on the economy to be laughable [emphasis added below]:
China’s Growth Figures Fail to Add Up (Financial Times, August 4, 2009, Jamil Anderlini)
China’s gross domestic product figures are among the world’s most closely watched since they can move markets or boost hopes of an imminent recovery.
But the latest set of first-half numbers provided by provincial-level authorities are far higher than the central government’s national figure, raising fresh questions about the accuracy of statistics in the world’s most populous nation.
…With the rest of the world looking to China as a beacon of expansion, the discrepancy is a reminder that statistics there are often unreliable and manipulated regularly by officials for personal and political purposes.
This is a very important point. By definition, governments control government statistics and they frequently manipulate those statistics to serve government’s purposes. However, in countries with freedom of speech and a free press, it is much harder for governments to do so.
Conversely, countries that are essentially dictatorships — China, Russia, Myanmar, Iran, North Korea, Saudi Arabia, Syria, Cuba — have much more control over the flow of information. So, if I see information on GDP growth or any other factor coming from one of these countries, I read it with a high degree of skepticism.
This FT article points out that even ordinary Chinese citizens find their government’s releases on GDP growth and wage growth to be increasingly laughable:
…The Global Times, controlled by the People’s Daily, the Communist party mouthpiece, reported that the public reacted with “banter and sarcasm” to NBS [China’s National Bureau of Statistics] figures showing average urban wages in China rose 13 per cent in the first half to $2,142.
It quoted an online poll showing 88 per cent of respondents doubted the official numbers.
An editorial on Tuesday in the China Daily, the government’s English-language mouthpiece, quoted another survey that found 91 per cent of respondents sceptical [kb: this is the British spelling I guess] of official data, up from 79 per cent in 2007.
But, never fear. The Chinese have bureaucrats have fashioned a really fascinating public relations campaign with a poetry contest to counter the fact that the citizens don’t trust the numbers:
…The criticism has prompted the NBS to launch a campaign last week, entitled “Statistical Feelings: We have walked together - Celebrating the 60th anniversary of the founding of New China,” to boost confidence among statisticians.
The campaign has already produced works such as: “I’m proud to be a brick in the statistical building of the republic.” In another poem, a contributor writes: “I can rearrange the stars in the sky because I have statistics.”
On the plus side, it is a good sign that Chinese citizens feel free to express skepticism about their government and its claims of GDP growth. On the other hand, if the skeptics are correct, this could be a bit dicey for investors in China. But, at least they could get a compilation of the great poems being generated by this campaign.
Via: Outside the Beltway
See also:
China to U.S. — Show us the math
China Counterattacks With “Buy China” Policy
- Business , Economy , Geopolitics , Investing
- Comments(0)
Did you enjoy this article?
