March 09, 2005

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Who to believe

Yesterday I discussed China's dodgy economic statistics. Today The Standard notes the head of China's national statistics bureau (NBS) has promised closer scrutiny of provincial GDP figures. But Jake van der Kamp in today's SCMP poses an interesting question: what if the NBS's numbers are the wrong ones (reg. req'd.) He looks at electricity consumption as a proxy for GDP growth and finds, not surprisingly, a close correlation. Looking at the figures for China:

...we get a dip in electricity growth in 1998 to far below the GDP growth figures. This ties in exactly with the experience in the rest of Asia and suggests that the mainland was not really quite as immune from the 1997 Asian financial crisis as the official figures indicate.

Then electricity consumption rocketed back up with the 12 months to December last year registering a growth rate of 15.2 per cent...Now take that 15.2 per cent, assume that electricity consumption growth is normally 2 per cent greater than GDP growth (about the average for the rest of Asia) and what you get is a mainland GDP growth rate last year of 13.2 per cent, almost bang in line with the supposedly suspect provincial numbers. Who is right now?

Good question.

posted by Simon on 03.09.05 at 01:19 PM in the China economy category.


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And in both 1997-98 and today there were sound political reasons for the central numbers to be fiddled. In 98 Zhu Rongji had staked his reputation on growth, while today Wen Jiabao has staked his reputation on slowing growth. It is therefore little wonder that in both cases the published figures bear little relation to reality.

posted by: dylan on 03.10.05 at 10:55 AM [permalink]

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