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September 02, 2004

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Seeing is not believing

Interesting article on China's statistics and their lack of robustness. A HKUST economist tried to reconstruct the private consumtion figures in China's GDP number. He used the same official guidelines in using the household spending surveys. But his numbers were different to China's National Bureau of Stats (NBS). The best part are the conclusions reached:

Holz drew the following conclusions:

  • China's published GDP value in any particular year isn't comparable to that of any other year.

  • An official annual GDP growth rate of x percent in a particular year doesn't imply that final demand -- the sum of consumption, investment and net exports -- in that year is x percent higher than in the previous year.

  • The official GDP statistics may be using wrong population data, overestimating rural population (which consumes less) and underestimating urban population (which consumes more).

  • Using separately released official population statistics, one would find GDP in 2002 was perhaps several percentage points higher than the reported figure of 8.3 percent.
    • The NBS does not discuss its methods. The major problem is that lack of consistency between the different years' data. Even worse, the inconsistencies are completely unpredictable and cannot be verified with other data, partly because the other data is also unreliable. The last conclusion is very interesting: China's economy was probably overheating far more than was widely acknowledged.

    The reason this mess has come about is simple: the NBS is not interested in accurate numbers. The NBS is interested in giving the right numbers to match the expectations of the leadership of the CCP. Politics drives the stats rather than the other way around. The key is the stats office says what it thinks people want to hear, rather than what is happening in reality. Does this matter? Yes. It's like someone driving a semi-trailer with a muddy windshield and faulty speedometer. With China's economy becoming more important not just to Asia but the world's economy, it should unsettle everyone that no-one has a clue as to what China's economy is really doing.

     posted by Simon on 09.02.04 at 12:30 PM in the China economy category.




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    Carnival of the Capitalists - September 6, 2004
    Excerpt: Hello, and welcome to the Labor Day edition of The Carnival of the Capitalists, a weekly roundup of some of...
    Weblog: Joe Grossberg
    Tracked: September 7, 2004 02:15 AM


    Comments:

    best stats on China are from the CIA. www.cia.gov/cia/publications/factbook/

    posted by: da on 09.02.04 at 03:07 PM [permalink]

    So how do they make accurate planning decisions if their numbers are shite?

     posted by: RP on 09.02.04 at 11:19 PM [permalink]

    That's the whole point, RP. They don't. In fact the decisions are often self-fulfilling prophecies because the stats office makes the numbers fit the decision.

     posted by: Simon on 09.03.04 at 12:19 PM [permalink]

    What a mess.

     posted by: RP on 09.03.04 at 11:30 PM [permalink]

    In fact the decisions are often self-fulfilling prophecies because the stats office makes the numbers fit the decision.

    You can use the same for the factbook from CIA(www.cia.gov/cia/publications/factbook/). It's full of bullshit and sure CIA needs those so-called "factbook" to aid its decisions.

    The key is the stats office says what it thinks people want to hear, rather than what is happening in reality.

    Cannot agree more. When you have decided to believe that Chinese government is the "enemy", you want to believe anybody who is critique China. I saw too many of them....

    Politics drives the stats rather than the other way around

    I am a Chinese and I live in USA. I was amazed to see how few people know about China, and worst part is, those people who don't know a thing about China want to impress people... My suggestion is if you want to look smart, talk to some real Chinese first.

    posted by: Yi on 09.07.04 at 04:37 AM [permalink]

    The CIA had an opening for an assassin. After all of the background checks, interviews, and testing were done there were three finalists - two men and one woman. For the final test, the CIA agents took one of the men to a large metal door and handed him a gun.

    "We must know that you will follow your instructions, no matter what the circumstances. Inside this room you will find your wife sitting in a chair. You have to kill her." The first man said. "You cant be serious. I could never shoot my wife!"The agent replies, "Then you?re not the right man for this job."

    The second man was given the same instructions. He took the gun and went into the room. All was quiet for about five minutes. Then the agent came out with tears in his eyes. "I tried, but I cant kill my wife." The agent replies, "You dont have what it takes. Take your wife and go home."

    Finally, it was the womans turn. Only she was told to kill her husband. She took the gun and went into the room. Shots were heard, one shot after another. They heard screaming, crashing, banging on the walls. After a few minutes, all was quiet. The door opened slowly and there stood the woman. She wiped the sweat from her brow and said, "You guys didnt tell me the gun was loaded with blanks. So I had to beat him to death with the chair."

     posted by: Jokes on 10.09.04 at 08:15 AM [permalink]




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