China’s GDP figure is more fantasy than fact
The strength of China’s economy will have a critical influence on the future of the world’s shipping industry, but the mainland’s imaginative GDP numbers remain a joke.
So it is hardly surprising then that the officials are prepared to grossly manipulate the provincial GDP figures, although this is probably more an attempt to avoid a kick up the backside from Beijing than to earn a pat on the back.
This week China’s National Bureau of Thumbsucks (or should that be Statistics) announced that the mainland’s gross domestic product for the first three quarters grew by 7.7 percent. In the current recession that figure alone is jaw-dropping enough, but a look at the 31 provinces’ GDP statistics renders the national figure, and by extension any other statistics produced by the national bureau, thoroughly untrustworthy.
Of the 31 provinces, municipalities and autonomous regions in China, only three reported lower economic growth than the national figure – Shanxi, Shanghai and Xinjiang.
More than half of the provinces reported double-digit growth, led by Inner Mongolia Autonomous Region with a breathtaking 16.9 percent. Reports show that the combined GDP figure of the provinces was a mere US$355 billion higher than the national figure.
The mainland’s statistical system allows provinces and regions to independently collect their own economic data and uses the figures as a means of determining the productivity and effectiveness of officials in charge. Small wonder then that the bosses manipulate and fudge the numbers.
So what is being done about it? Nothing. Or nothing that works, anyway. Way back in 2004, the provinces managed to beat the national GDP figure by an interesting 19.4 percent, sparking a government probe. Five years later and the provincial average is still leading the national number.
This raises huge questions about the veracity of all the mainland’s statistics. They are vital instruments for companies involved in business in China. Statistics on trade, for instance, can determine investments from transport and infrastructure companies.
Analysts always say power consumption levels more accurately reflect China’s economic status than the dodgy GDP figures, but the onus is on the mainland to provide the international business community with statistics that stand up to scrutiny.
Because if the national GDP figure is based on the provincial numbers, and the provincial numbers don’t add up, the whole lot may as well be chucked out.