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In the third quarter of 2019, China’s GDP growth rate dropped to 6.0 per cent, which is at the bottom end of China’s target range of 6 to 6.5 per cent growth for 2019. Photo: EPA
EconomyChina Economy

China to unify regional economic data calculation from early 2020 to further boost acceptance of figures

  • Economic data quality has constantly been questioned, particularly at a local level where governments have strong incentives to inflate figures for political promotion
  • News comes with analysts questioning if a census will be modified to allow China to reach its goal of doubling the size of its economy in 2020 from a decade earlier
China economy
Sidney Leng
Sidney Leng
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China will unify the way it calculates regional economic output from early 2020, amid scepticism about the reliability of Chinese data and suggestions it will modify economic data to reach a key Communist Party goal.

According to National Bureau of Statistics spokesman Liu Aihua, China will start by calculating 2019’s regional gross domestic product (GDP) in a unified way in 2020, without elaborating on details.

In the past, the NBS calculated national GDP, while the respective provinces computed their own economic headline figures.

In 2017, the NBS said it would reform GDP calculations in 2019 after the change initiated as early as 2004 was endorsed by the top Chinese top leadership in 2017.

China’s economic data quality has constantly been questioned, particularly at a local level where local governments have strong incentives to inflate headline numbers for political promotion. The NBS has attempted to contain data fraud at a local level by holding local leaders accountable while also revising national statistics law.
In the past, the aggregate regional GDP figure was often more than the national GDP figure, with the aggregate provincial GDP 4.6 trillion yuan (US$655 billion) more than the national figure in 2015.

Under the new system, the national GDP figure should largely match the aggregate GDP figure as the NBS will compute the provincial numbers, while the provinces will calculate figures at a city level. In the past, the NBS was not involved in the regional calculations, while the higher level governments at a regional level would only check the data provided to them from the lower level administrations.

In 2018, the NBS ran pilots programmes of the new method in the provinces of Zhejiang, Hubei and Shaanxi. It found, that over the first three quarters, some city level GDP figures were higher than initially reported, while some were lower.

The news comes after analysts have questioned if the latest edition of the economic census would be modified to allow China to reach its goal of doubling the size of its GDP in 2020 from a decade earlier.
To achieve this, most analysts believe China will need to achieve a GDP growth rate of over 6.0 per cent in 2019 and 2020. In the third quarter of 2019, China’s GDP growth rate dropped to 6.0 per cent, which is at the bottom end of China’s target range of 6 to 6.5 per cent growth for 2019.

After each of the previous three census rounds, the NBS said they had modified the total GDP, with the level in 2004, 2008 and 2013 increased by 16.8 per cent, 4.4 per cent, and 3.4 per cent, respectively.

This article appeared in the South China Morning Post print edition as: Unified approach on data aims to silence the sceptics
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