In the middle of last month, economic observers waited in anticipation to see whether government measures this year to cool growth had made an impact. Instead, a confusing string of data published by the National Bureau of Statistics (NBS) has left many more questions than answers.
Second-quarter gross domestic product grew 9.6 per cent year-on-year, according to the bureau's report. Many observers, however, think the figure is too low. The base amount of last year's second-quarter GDP, they argue, was rather low due to the Sars epidemic. Thus, the growth this year should be much higher than 9.6 per cent.
In response to these doubts, NBS officials explained that they had made a mistake last year by underestimating the second-quarter growth rate over that of the previous year. The figure should be 7.9 per cent, instead of the 6.7 per cent originally reported, they said. Accordingly, the growth rate this year was more understandable. Officials have publicly acknowledged the miscalculation.
But many economists, businessmen and even economic officials have attacked the officials over the revision, pointing out that this is not the first time that data-gathering authorities have made such blanket adjustments of statistics. They argue that the errors pose a grave challenge to the credibility and authority of the bureau, and urge a serious review of China's statistics-gathering regime. I could not agree more.
A careful examination of the facts should prove that if, as the NBS claims, a hasty survey of the havoc caused by Sars was to blame for their erroneous tallies last July, then they had plenty of time to rectify their mistakes earlier. Instead, they waited a year to announce the corrections. Moreover, it remains to be seen what impact the miscues had on GDP figures for the whole of last year. In all, how many sets of data since last year need to be adjusted? NBS officials say the miscalculations resulted wholly from technical factors. Yet there have been media reports that the NBS was forced to make the statistical 'adjustments' of last year's base only after Vice-Premier Zeng Peiyan raised doubts over the reported 9.6 per cent growth rate. Whether or not this is true, one thing is certain: there is widespread suspicion that NBS reports are indeed heavily influenced by external factors.
As the structure of China's economy diversifies and more people start to make key decisions based on official data, the potential fallout from miscalculations is compounded. Since China joined the World Trade Organisation, the demand for accurate and reliable statistics has never been greater. This leaves only one option: the government must reform its data-collection practices.