China’s economy is plagued by numbers game
Dodgy data appears to have infected the DNA of the nation and wrecked credibility in Beijing’s system
Data is the DNA that monitors the well-being of nations across the world.
In China, it appears government statistics are not worth the emails they are sent on.
Economic numbers are particularly prone to manipulation.
Even the State Council, the chief administrative authority of the People’s Republic of China, has been forced to issue new guidelines after a damning assessment last year.
“The effectiveness of the statistical supervision mechanism needs to be improved. [We must] adhere to scientific methods to make statistics timely, accurate, and reliable. We must prevent falsehood and resolutely curb ‘corruption in numbers,’” the guidelines confirmed in December.
For ChinaFactor, the phrase “corruption in numbers” stood out like a line of dodgy data. To combat what has become an epidemic in scale, Beijing aims to carry out routine “spot checks” to crack down on fake figures.
Judging by the latest numbers released by the National Bureau of Statistics on Tuesday, it appears to be a work in progress.
Data dump:
- Industrial output jumped 7.5% in January and February compared to the same period in 2021.
- Reuters news agency had predicted a 3.9% increase.
- Retail sales expanded 6.7% year on year amid rising demand during the Chinese New Year holidays and the Beijing Winter Olympics.
- But the debt-plagued property sector went into a tailspin with residential sales contracting more than 22% in the first two months.
- Still, fixed asset investment surged more than 12% compared with analysts’ predictions of 5%.
- Infrastructure investment also increased by 8% in the January-February period, fuelled by local government bonds.
There are insufficient figures reflecting negative changes [in the economy].
Lou Jiwei, the former Chinese Finance Minister
Silencing the critics: The decision to overhaul the system came after former Chinese Finance Minister Lou Jiwei broke Communist Party protocol in early December and spoke out about the issue.
What he said: “There are insufficient figures reflecting negative changes [in the economy]. In contrast, the United States has both positive and negative numbers,” Lou told a forum held by the China Center for International Economic Exchanges in Beijing.
Downbeat reaction: “China’s economy is still moving around the bottom. There’s no clear sign of a significant rebound,” Lu Ting, the chief China economist at investment bank Nomura, said on Tuesday.
Delve deeper: ChinaFactor was left intrigued by this line from Fu Linghui, a National Bureau of Statistics spokesman. He pointed out that the Winter Olympics played a major role in January-February “retail sales.”
Cuddly economics: A stampede to buy merchandise such as mascot Bing Dwen Dwen boosted the data. But that is an awful lot of cuddly toys to offload on shoppers.
Big picture: “The quality of data during [Chinese] New Year isn’t very high anyway. [With] rapidly spreading Covid cases over the past three weeks, we cannot assume data for March will be naturally good,” Lu, of Nomura, said.
Lockdown fears: Covid-19 outbreaks are spiraling across the world’s second-largest economy. On Tuesday, there were 5,000 new cases of the more virulent Omicron variant. The rise could seriously damage China’s economy with major cities going into lockdown.
China Factor comment: The numbers are still low compared to other countries if you believe the official statistics. As we said, dodgy data seems ingrained in the ruling Communist Party’s DNA. Why should the health figures be any different?