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Gauge economy on basis of credible statistics
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09:56, August 13, 2009

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China's economy grew 7.1 percent in the first half of this year, a figure that dazzled the world. But local economic statistics have puzzled the public.

During the same period of time, 24 provinces scored a growth rate higher than the national rate, including 15 that grew more than 10 percent, while only five were below the national level.

Put together, the local provincial GDP was 1.4 trillion yuan more than the national GDP, which stood at 13.9862 trillion yuan. In other words, the total of local GDPs is around 10 percent higher than the national figure.

The central and provincial governments conduct dual GDP measurements, whereas the national figures are based on data collected by the National Bureau of Statistics (NBS), and are considered more accurate. The NBS reviews the provincial figures and may request verification when it thinks the numbers are questionable.

Technically, the discrepancy between national and local figures exists due to problems such as repeated counting and different data sources. But it seems the gap between total local GDPs and the national figure is growing. It is a good reminder of how China’s economic performance evaluation is too centered on the GDP.

The GDP is only one indicator to gauge whether the economy is headed in the right direction or not, but it has been excessively emphasized in China to the extent that simply growing the GDP itself has become a goal.

The daunting challenge of getting China's economy out of recession this year is oversimplified as "securing eight" – making sure the country achieves an 8 percent growth rate. This has been elevated to the level of a political mission.

At the local level, this mandate will no doubt result in the reporting of exaggerated figures, especially considering that it is also what the political careers of local officials hinge on.

Statistics more directly related to the populace, like the unemployment rate and the Consumer Price Index, are being questioned as well. In early July, the Ministry of Education put the employment rate of college graduates this year at 68 percent. With young graduates struggling to get a job an everyday scene, the ministry has come under public fire for making up such an absurd number.

China's statistics have made certain progress since the start of reform and opening-up. The country's statistics law has clear clauses with penalties for falsification of data, but in reality, officials are seldom disciplined or held legally responsible for fabricating figures.

China's statistics increasingly carry global implications.

The world is eyeing China as the engine of global economic recovery, but confidence in the Chinese economy must be based on statistics that reflect the true situation. And proper economic stimulus policies can only come from credible statistics.

Source:Globaltime.com




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