Statistical paper trail throws veil over reality of economic trend
EVEN AS RECENTLY as the mid-1990s, monitoring China's economic statistics was simple enough.
Every February or March the State Statistical Bureau held a briefing in Beijing at which it would release the headline economic indicators for the previous year. About six months later it would follow this up with the publication of an annual China Statistical Yearbook - the mainland's most comprehensive repository of economic data.
But by the late 90s this straightforward process had changed dramatically. The bureau implemented quarterly briefings for the mainland and foreign press, and by some miracle of foresight even began releasing its year-end data in late-December before the end of the calendar year.
Provinces and cities, which along with industrial ministries had previously only published annual statistical yearbooks, followed suit with their own quarterly briefings. Almost overnight, the mainland was awash with often contradictory numbers from various sources.
In the more than two years I have lived in Guangzhou, there have been 18 quarterly economic briefings given by provincial and municipal officials.
Thankfully I have not had to attend all of them. But even so it does not take too long before these briefings start to blur together. If you have been to one you have been to all of them. The same, no doubt, is true of the bureau's quarterly briefings on the national economy.
Too much data is clearly better than too little. Beyond the sheer scale of its growth, China's economy has also multiplied in its complexity over the past 10 years. It is only right that this complexity should be reflected in the country's economic reporting.
The problem is that with so much data out there it is getting hard to see the forest for the trees. Coverage and analysis of Guangdong and Guangzhou's economic performances in 2000 and so far this year, for example, lauded 13 to 20 per cent year-on-year increases in exports. By the same token, in 1999 and last year everyone lamented stagnant or even negative export growth.
It is therefore worth stepping back and looking at the longer-term economic trends in Guangdong and Guangzhou's quarterly releases, many of which are also evident in the national economy.
The most important is that after a steady decline in gross domestic product growth from the high-teens to the high single-digits in the 90s, Guangdong and Guangzhou have held GDP growth steady at, respectively, 10 per cent and 12 per cent.
The most consistent factor in both the provincial and municipal economies has been consumer spending. Over the past 10 quarters in Guangdong, year-on-year retail sales growth has held steady between 10.2 per cent and 12.5 per cent. Retail sales growth in Guangzhou has been consistent at 10 per cent to 12 per cent - except for three quarters last year when it spiked at 15 per cent to 17 per cent.
Such consistent consumer spending increases have not been able to stave off persistent deflation, implying that even in two of China's strongest regional economies many goods remain in chronic oversupply.
As noted above, Guangdong and Guangzhou's export growth has been as fickle as consumer spending has been firm. At the mercy of cyclical demand patterns overseas, exporters have taken two steps forward one year and then stood still the next. Yet for all the gloomy reports in the off-years, the result is still an enviable rise in the region's export base of about 20 per cent every two years.
This leaves the last of Guangdong and Guangzhou's main economic engines: local investment. As with exports, one leading indicator of investment - cumulative capital construction and technical renewal projects by state-owned units - has fluctuated wildly.
In Guangdong this indicator has veered between minus 0.5 per cent and 18.6 per cent over the past 2.5 years. In Guangzhou, the corresponding range has been from minus 17 per cent to 34 per cent.
But another indicator - property investment - has recorded consistently large year-on-year gains up to 34 per cent in Guangdong and Guangzhou. This is worrying because it implies that the region's local investment and, ultimately, GDP statistics are padded - at least in part - by overspending in the overbuilt commercial and residential property markets.
Guangzhou is littered with concrete carcasses of at least 55 major property projects on which work has been suspended. The largest - the massive twin-tower China City Plaza project in Guangzhou's new Tianhe commercial district - was the object of a window-dressing exercise.
Wanting the city to look its best for last November's Ninth National Games, Guangzhou shelled out an undisclosed - but surely large - sum of money to put windows on China City Plaza's abandoned concrete frame.
No doubt some officials prefer the days when their statistics did not reveal quite so much about the quality of economic growth.