A lot of people shrug off the amazing numbers coming out of Beijing as nothing but smoke and mirrors.
But the thing is, the communist party could not falsify statistics without showing its hand to the hundreds of banks, organisations, and think tanks that are active in China.
The World Bank’s Gao Xu argues that even a small manipulation of GDP would require a nearly impossible conspiracy. For one thing, there are tons of data collectors, including government, semi-government, and private foreign institutions:
For example, in addition to the National Statistical Bureau (NBS) which is the main official data provider in China, there are dozens of other government branches including the People’s Bank of China (central bank of China), Ministry of Finance, Ministry of Commerce, and National Development and Reform Commission compiling and releasing their own data. Meanwhile, most sector associations like China Iron and Steel Association and China Association of Automobile Manufacturers have their data available to the public. Moreover, some companies like Soufun and CLSA also report data compiled by them. This is not to mention the high quality price data generated by various markets (Shanghai Futures Exchange, Dalian Commodity Exchange, etc.), everyday as China has become a market-based economy.
In addition, different institutions’ data has to line up:
Just like how different parts of the economy are connected to each other within an organic whole, data released by different institutions is interrelated and need to be consistent with each other. Hence, any attempt to manipulate data—say, flattering the GDP number a little bit—requires concerted efforts of various government departments as well as private sector institutions. If there are some participants in the circle not doing this kind of massage to their own data, inconsistency arises, leaving footprints of manipulators in statistics.
Xu adds that he hasn’t found any trace of data manipulation in recent years, despite dealing with it for over a decade. Moreover, he stresses that within academia, most researchers agree agree ‘that there is little sign that China is manipulating its economic data.’
(Tip via Alphaville)
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