Lies, damn lies and Chinese
statistics By Florence
Chan
HONG KONG - In China, one's political
career is always pegged to his or her performance, which
is mostly assessed by the growth of gross domestic
product (GDP) within the person's jurisdiction. To win promotion,
local authorities are tempted to doctor local GDP
figures. Though Beijing has made it clear that development
should be sustainable and scientific, governments
at local levels still engage in a GDP growth race
that seems unlikely to slow significantly until the
17th Chinese Communist Party National Congress in
2007, which might witness some important
reshuffles.
According to the National Bureau of
Statistics, the national GDP registered 5.877 trillion
yuan (US$708 billion) in the first six months of 2004,
and a year-on-year growth of 9.7%. Theoretically, these
data must cover China's 23 provinces, five autonomous
prefectures and four provincial-level municipalities.
However, if one adds up the interim GDP results released
by all these 32 local governments, one gets 7.027
trillion yuan, and an average growth of 13.4%. That's
just how exaggerated the reports by local governments
can be.
The state statistical system of
China is divided into five grades ranging from village
through county, city, province, up to the central government. As a
rule, the first grade hands in the data to the second,
then the second to the third, and so forth. The fact
is, secretaries of villages located in the same area
find out from one another the GDP data they are going
to report. To work things right, the figures must not
be too good or too bad, for it would incur either
jealousy or contempt. Likewise, the data are "adjusted" along the
other grades as well, exaggerating the inaccuracy.
Well aware of this inherent inaccuracy, the
central government reads local GDP reports for reference
only. "As everybody knows, local statistics in China are
suspect. If the central government sets the GDP growth
target at 8%, the provincial governments will report 9%
growth and the counties 10-12%. So the central
government, as a general rule, takes 2 percentage points
off the local data to arrive at the final result," said
Cao Yushu, chief of the policy research office under the
National Development and Reform Commission.
The
nationwide statistical growth race is far too evident
between regions of similar economic strength and
political importance. Take two municipalities for
example: Beijing declared that its 2004 interim GDP
increased by 15.4% year-on-year, while the adjacent
Tianjin city quoted 15.9%. Given that the former is
preparing itself for the 2008 Olympic Games, its rapid
GDP growth is understandable, but no one has any clue as
to why Tianjin is growing even faster.
Guangdong
province tops the GDP list for the first half of 2004,
followed by Shandong, Jiangsu and Zhejiang provinces -
with year-on-year growth rates of 15.1%, 15.2%, 15.1%
and 15.5%, respectively. The four are not only equal in
economic strength, but are also in close geographical
proximity - which might explain the similarity in the
economic figures. Shandong, Jiangsu and Zhejiang are
immediate neighbors along the eastern coastline. Again,
the Tibet Autonomous Region ranks last on the list, with
a healthy GDP growth of 11.9%, only behind the Qinghai
Autonomous Region and Ningxia Autonomous Region, both
recording 12% growth.
Apart from
overstatement, the GDP rocket is to a large extent fueled by costly
but unproductive window-dressing projects throughout
the country. Wang Huaizhong is a case in point. As mayor
of Anhui province's Fuyang city, he successfully
lobbied for a local airport that was started in 1995
and completed three years later, costing 320 million
yuan. Though the airport mostly lies idle but
demands substantial maintenance coupled with staff salaries
from the Fuyang government, it still helped Wang climb up
to the post of vice governor of Anhui. The
airport, which recorded only 920 passengers in 2002, has
become a financial burden, dragging the local
government down into a debt of more than 2 billion yuan, almost five
times its revenue. But Wang's Anhui reported an average
annual GDP increase of 22%. He was, however, deposed
for exaggeration before he was convicted of corruption
and executed this month, as an example to ambitious
party bureaucrats.
Another perfect example of
window-dressing would be the airport of Zhuhai city,
which cost close to 5 billion yuan. Although its
passenger and freight traffic in an entire year is less
than what the Hong Kong airport gets in five minutes, it
is included into Zhuhai's GDP calculation.
Liu Junning, a respected scholar, published a commentary
in the Hong Kong press pointing out that officials
in developed areas win promotion easily while those
in undeveloped areas do not. This is the root cause of
the irrational investments that plague the Chinese
economy. China's GDP has shown manifold increases in the past
50 years, but the resource consumption has
simultaneously surged 40 times. An investment increment of
5-7% generates a GDP growth of merely 1%. This is the
reason moderate reformist Premier Wen Jiabao set forth a
macro-control policy last year aimed at cooling down the
red-hot economy, with the focus on slashing flashing and
extravagant but unnecessary window-dressing projects.
Since the macro-control policies began to take effect
last April, fixed-assets investment began to cool down
and the white elephant construction hysteria has been
curbed to some extent.
The growth rate of
national permanent assets investment logged 53% in
January but dropped to 31% in June. Nationwide, Beijing
has witnessed the biggest slump as its growth rate. It
reached a prodigious 53% in January, but fell to a huge
31% in March and a very high 18% in June. It is
evidently paying heed to its mayor's call for a
relatively frugal Olympics in 2008.
However,
statistics indicate a serious regional imbalance between
eastern and western provinces in terms of adherence to
the cooling-down policy. From January to June, the
developed and better-off east pumped 1,260 trillion yuan
into fixed assets investment while the west only pooled
884.3 billion yuan for infrastructure construction.
Hebei province in the east logged an increase of 38% in
permanent assets investment, the highest in the first
six months of 2004. It was followed by Fujian at 36% and
Zhejiang at 34% - all above the national average of 31%.
On March 1, Vice President Zeng Qinghong
attended the 2004 spring semester inaugural ceremony of
the central party school, where principal communist
leaders are selected, educated and groomed. There, he
called for sustainable development, scientific personnel
selection and efficient administrative governance. If
the graduates do not heed his call and correct their
attitudes, then China is in for more lies, damn lies and
local statistics. Evidently, there are still plenty of
party officials who will advance their careers by
advancing the GDP.
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