Thursday, April 23, 2009

Fudging the Numbers

A few days ago China's top statistics official vowed to improve the authenticity and accuracy of government statistics after foreign media questioned the credibility of Chinese economic data.

"To keep (official statistics) true and credible is not only our duty but also our need to accept public supervision," said Ma Jiantang, head of the National Bureau of Statistics (NBS), in a statement on the NBS Website.

Ma made the pledge, commenting after an article on the Wall Street Journal by Tom Orlik, who is also a former advisor to the British Treasury.

Orlik raised concerns of dubious figures that could overstate or understate the country's real economic situation.

The problem is that the central government depends on provincial and municipal governments for statistics and the numbers can be below the actual reading to get more government subsidies or inflated to make the economic picture look good and benefit officials' work performances.

While the central government probably knows the numbers aren't exactly accurate, and so it adjusts the raw data it gets, thus further skewing the picture of the country, from stats on population to agricultural output and exports.

While China is revising its law on statistics this year, including the strong possibility of penalizing officials who "intervene in government statistical work and manipulate or fabricate data", there has to be a better way to get more accurate numbers.

So in the meantime, all the statistics you read coming out of China, take it all with a grain of salt, or two, or three...

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