If there’s a prevailing theme about Chinese economic data, particularly the nation’s GDP report, it’s that it’s remarkably consistent.
Perhaps too consistent.
Just have a look at Chinese GDP over the past decade or so, particularly over recent years.
Remarkable, isn’t it?
The stability in the data has, understandably, drawn ire from analysts or investors around the world, helping to fuel the belief that it does not represent the reality as to what’s happening on the ground, but rather what the government wants to portray to its citizens and those outside the nation.
Matters haven’t been helped by reports that provincial GDP data has been falsified in the past, done to appease the will of Beijing.
According to a report from Xinhua, a state-run government news agency, in late 2015, “several” local officials in China’s Northeast region admitted to faking economic data in recent years to show high rates of growth when the real numbers were much lower.
It’s meant that once market-moving date data releases, gauging what is happening in the soon to be largest economy in the world, are now seen by many as being meaningless.
Indeed, the only shock from Chinese data nowadays is when it points to economic weakness, rather than economic strength.
Well, perhaps it’s time to get interested in Chinese data once again.
According to Reuters, the government appears set to adopt new rules to prevent officials from falsifying statistics to help improve the quality of data.
In a statement released on Wednesday, it said that it has approved draft rules on implementing the statistical law that will regulate statistical activities “from the source”.
The rules would strengthen efforts to hold accountable people falsifying figures to “ensure the authenticity and authority of statistical data”, said Reuters, citing the cabinet document.
It vowed to improve its statistical system and methods, including for those towards new industries, although no further details were provided as to what changes will be brought in.
While that’s probably not going to be enough to drum up much interest from financial markets initially, it does, on face value, suggest that we may start to see some volatility creeping into the data.
Perhaps it will, but it’s understandable why many will remain sceptical.
Only time will tell.
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