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Its typically advisable not to accept Chinese economic data at face value as even the countrys own premier will tell you. Figures on everything from inflation and industrial output to energy consumption and international trade often dont seem to gel with observation and sometimes struggle to stack up when compared with other indicators.
How the figures are massaged and by whom is as much a secret as the real data itself. But in an unusual move, the National Bureau of Statistics clearly frustrated with the lies, damn lies has recently outed a local government it says was involved in a particularly egregious case of number fudging, providing rare insight into just how were being deceived.
According to a statement on the statistics bureaus website dated June 14 (in Chinese), the economic development and technology information bureau of Henglan, a town in southern Chinas Guangdong province, massively overstated the gross industrial output of large firms in the area.
An investigation by the state statistician into a sample of 73 out of a total 249 firms counted in the data found that 38 were too small to be counted as large firms and so shouldnt have been included, and a further 19 had either stopped production, moved out of the town or otherwise ceased to exit.
The statement said that 71 companies surveyed by the statistics bureau had industrial output of 2.22 billion yuan ($362 million) in 2012 in total, but that the local government recorded it as being 8.51 billion, almost four times as much as the actual figure.
The data was supposed to be contributed by the firms themselves using an online platform. Instead, employees of the Henglan economic development bureau entered the figures themselves from their office, the statement said. It also said that by May or June last year the relevant government leaders in Henglan knew about the distortions but chose not to do anything about it.
Calls to the Henglan economic development bureau Wednesday went unanswered.
The statistics bureau doesnt say why Henglan inflated its industrial output numbers. But indications that a local economy is sagging could reflect poorly on the prospects for promotion of local officials, and Chinas southern provinces have been particularly hard hit by the global slowdown in demand for the countrys exports. Factories have closed, moving inland and overseas in search of cheaper labor, denting local government revenues.
When governments are looking to burnish their track record, that can put the local statistics departments in a very awkward situation, said a commentary piece that ran Tuesday in the Economic Daily (in Chinese), a newspaper under the control of the State Council, Chinas cabinet. The article said that one of the biggest obstacles to ensuring accurate data is that the agencies responsible for crunching the numbers arent independent from local authorities. Moreover, it argues that penalties for producing fake data were too mild to act as a deterrent.
The National Bureau of Statistics said that it pursued the Henglan case on a tip from a whistleblower. How widespread the problem is elsewhere in the country is anyones guess. And sure, this may have been going on for years with little real impact on economic decision making. But with Chinas growth slowing for first time since becoming a major player in the global economy, artificially inflated figures threaten to further complicate efforts by companies and governments everywhere to gauge what that slowdown means for them.
http://http://blogs.wsj.com/chinarealtime/2013/06/19/a-rare-look-into-how-china-fudges-its-numbers/
How the figures are massaged and by whom is as much a secret as the real data itself. But in an unusual move, the National Bureau of Statistics clearly frustrated with the lies, damn lies has recently outed a local government it says was involved in a particularly egregious case of number fudging, providing rare insight into just how were being deceived.
According to a statement on the statistics bureaus website dated June 14 (in Chinese), the economic development and technology information bureau of Henglan, a town in southern Chinas Guangdong province, massively overstated the gross industrial output of large firms in the area.
An investigation by the state statistician into a sample of 73 out of a total 249 firms counted in the data found that 38 were too small to be counted as large firms and so shouldnt have been included, and a further 19 had either stopped production, moved out of the town or otherwise ceased to exit.
The statement said that 71 companies surveyed by the statistics bureau had industrial output of 2.22 billion yuan ($362 million) in 2012 in total, but that the local government recorded it as being 8.51 billion, almost four times as much as the actual figure.
The data was supposed to be contributed by the firms themselves using an online platform. Instead, employees of the Henglan economic development bureau entered the figures themselves from their office, the statement said. It also said that by May or June last year the relevant government leaders in Henglan knew about the distortions but chose not to do anything about it.
Calls to the Henglan economic development bureau Wednesday went unanswered.
The statistics bureau doesnt say why Henglan inflated its industrial output numbers. But indications that a local economy is sagging could reflect poorly on the prospects for promotion of local officials, and Chinas southern provinces have been particularly hard hit by the global slowdown in demand for the countrys exports. Factories have closed, moving inland and overseas in search of cheaper labor, denting local government revenues.
When governments are looking to burnish their track record, that can put the local statistics departments in a very awkward situation, said a commentary piece that ran Tuesday in the Economic Daily (in Chinese), a newspaper under the control of the State Council, Chinas cabinet. The article said that one of the biggest obstacles to ensuring accurate data is that the agencies responsible for crunching the numbers arent independent from local authorities. Moreover, it argues that penalties for producing fake data were too mild to act as a deterrent.
The National Bureau of Statistics said that it pursued the Henglan case on a tip from a whistleblower. How widespread the problem is elsewhere in the country is anyones guess. And sure, this may have been going on for years with little real impact on economic decision making. But with Chinas growth slowing for first time since becoming a major player in the global economy, artificially inflated figures threaten to further complicate efforts by companies and governments everywhere to gauge what that slowdown means for them.
http://http://blogs.wsj.com/chinarealtime/2013/06/19/a-rare-look-into-how-china-fudges-its-numbers/