THEY HAVE DONE it again across the border, proven that the sum of the parts is greater than the whole, and they have done it by a wider margin than ever. Every year at about this time the individual provinces report their gross domestic product for the previous year to the central Government and, for years now, the same phenomenon has shown up every time. When you add all these provincial GDPs together you get a higher figure than the official one announced earlier. The official figure for China's nominal GDP last year was 9.59 trillion yuan (about HK$8.98 trillion). The provincial numbers show a total of 10.66 trillion yuan, 11.1 per cent greater. The variance the previous year was only 8.7 per cent and, as the chart shows, if you go back further the difference declines until you get parity in 1995. I cannot say whether this is because previous-year figures are revised every year. I forgot to check this time before I overwrote the older data on my spreadsheet, although it is a reasonable guess this is what happens. It does not happen, however, with the reported provincial growth rates for real GDP. Assign each an economic weighting, add them all up and you get an alternative figure for national growth. That figure was 7.3 per cent, Beijing said earlier, but do it province by province and you get 9.3 per cent and once again the margin has widened. Notice that two lines for growth rate in the second chart stay apart much longer into the past than 1995, when the figures for the nominal value of GDP converged. There is another interesting phenomenon here too. Last year, three provinces - Shanxi, Guanxi and Yunan - reported real GDP growth rates for 2000 that were less than the 8 per cent national figure announced earlier in Beijing. Bad move, fellas. It can make the provincial boss a little wobbly on his seat of power. You cannot expect him to retain his perch with confidence if you provide evidence like this that he cannot keep up with his counterparts elsewhere. He will not like it and it is no way to ensure friendly relations with his provincial statisticians. The lesson has clearly been learned. This year only a single province, Yunan, got it wrong and Yunan has better grounds for excuses than most. Shanxi may also have got it wrong but Shanxi has so far got around it by not reporting figures for last year yet. I have had to estimate them but it makes little difference to the provincial total one way or the other. Which of these two shall we believe? On the one hand we have a national figure announced every year before the year ends, which does not give you great confidence in accuracy, and on the other we have provincial figures that, shall we say, are perhaps a little politically inspired. The obvious conclusion in China is to disregard any GDP growth number to the right of the decimal and suspend belief on the first one to the left. Graphic: jake08gbz
