News / Asia

    Probe Targeting China's Statistic Head Sparks Concern

    FILE - Wang Baoan attends a news conference in Beijing, China, in this Jan. 13, 2010 file photo. The head of China's Statistics Bureau is being investigated for alleged discipline violation, the ruling Communist Party's anti-corruption watchdog said on Jan. 26, 2016.
    FILE - Wang Baoan attends a news conference in Beijing, China, in this Jan. 13, 2010 file photo. The head of China's Statistics Bureau is being investigated for alleged discipline violation, the ruling Communist Party's anti-corruption watchdog said on Jan. 26, 2016.

    For years, world governments and multinational companies have fretted over the quality of China’s economic statistics. The recent launching of a Communist Party investigation into Wang Baoan, head of the National Statistical Bureau, on suspicions of corruption, has heightened those concerns.

    As the world’s second largest economy, which has enormous sway on global markets, Chinese statistics are of great importance. Economists are now asking what prompted the government to launch the investigation only months after Wang had been vetted for this crucial job.

    So far, it is not entirely clear why Wang has been targeted.

    "I do not have any information or insights about the allegations of misdoings in the Statistical Bureau,” said Penelope Prime, director of the Atlanta based China Research Center. “I understand there is pressure to report as positive numbers as possible in terms of growth, but everyone knows that the economy is slowing".

    Some analysts have suggested that the investigations could be related to his work before being appointed to the NSB. Whatever the reasons, the move is likely to affect the international confidence in Chinese statistics.

    “To remove the head of the statistics department for violations of party discipline just gives ammunition to those that doubt Chinese government statistics, and so the negative is clear,” said Jonathan Brookfield, professor in The Fletcher School of Law and Diplomacy at the U.S. based Tufts University.

    It is possible the government is trying to replace Wang with someone it can trust more. “Having one's own person there, I think, could be helpful in a number of ways,” Brookfield said while listing the benefits the government can derive from it.

    “The net effect might be to downplay something unpleasant like a slowdown in economic growth,” he said.

    The NBS can bring about this effect even without the need to cover up existing data. It can also change the way certain items are measured, and control the timing of data release, and he pointed out.

    Real GDP?

    International research organizations have long questioned China’s GDP figures, saying they are deflated during years of boom, and inflated when there is a marked slowdown as is happening now. Some economists say China’s economic growth may be one or two percent lower than the 6.9 percent claimed by the government.

    FILE - A closed brick factory building on the outskirts of Beijing, China, Jan. 18, 2016. Chinese manufacturing ebbed in January to its lowest in more than three years, a possible sign of further weakness in the world's No. 2 economy.
    FILE - A closed brick factory building on the outskirts of Beijing, China, Jan. 18, 2016. Chinese manufacturing ebbed in January to its lowest in more than three years, a possible sign of further weakness in the world's No. 2 economy.

    Agatha Kratz, an associate research fellow at the London based European Council on Foreign Relations, feels that China’s GDP statistics cannot be fully relied on because the government does not explain how it uses the GDP deflator, a yardstick used to adjust the value of goods and services to current prices.

    “Real GDP figures are often believed to be somewhat less reliable. This is due to strong opacity around the calculation of the GDP deflator, which allows real GDP smoothening for political reasons,” she said.

    But attempts to rework statistics do not help China because world economists are already factoring in a strong margin of error while analyzing Chinese numbers.

    “The real GDP, while probably smoothened, cannot hide more profound underlying trends –notably that of a clearly decelerating growth trajectory in China, which everyone has become aware of,” Kratz said.

    'Wind of falsification'

    Even the Chinese government makes little effort to downplay the fact that the official data is not fully accurate.

    Chinese state media reports recently noted that several officials in northeastern China admitted to inflating investment figures and other data in previous years.

    In fact, Chinese officials have been struggling for two decades to overcome the “wind of falsification and embellishment” in data collection and reporting.

    In 1999, then NBS director, Zhang Sai complained about "administrative interference in statistical work."

    A year later, then Premier Zhu Rongji admitted that "falsification and exaggeration are rampant."

    At one stage, the state-backed China Daily warned "statistical fraud will affect the country's economy by jeopardizing economic planning and policy-making."

    An investor looks at an electronic screen showing stock information at brokerage house in Hangzhou, Zhejiang Province, China, Jan. 11, 2016.
    An investor looks at an electronic screen showing stock information at brokerage house in Hangzhou, Zhejiang Province, China, Jan. 11, 2016.

    Shanghai Surprise

    Shanghai City Mayor Yang Xiong sprung a surprise in January last year when he declared the city was dispensing with the practice of fixing gross domestic product growth targets. Instead, he said the city would focus on sustainable and innovation driven growth and not chase investment and growth numbers.

    Ironically, Shanghai made the decision to change course after its growth lagged behind national development figures.

    One reason why officials over-report growth and results for other official targets is that their promotions are tied to their ability to meet those goals.

    When it comes to exports and imports, a widely used practice is to over-invoice or under-invoice.

    "High invoicing of exports does seem to be common and growing. I believe this is related to the demand for taking money out of the country beyond what is allowed, which is $50,000 per person per year," said Prime of the China Research Center.

    You May Like

    In Britain, The Sun Still Doesn’t Shine

    Invoking Spitfires and Merlin, Leave voters insist country can be great again, following surprising 'Brexit' vote last week

    Double Wave of Suicide Bombings Puts Lebanon, Refugees on Edge

    Following suicide bombings in Christian town of Al-Qaa, on Lebanon's northeast border with Syria, fears of further bombings have risen

    US Senators Warned on Zika After Failing to Pass Funding

    Zika threats and challenges, as well as issues of contraception and vaccines, spelled out as lawmakers point fingers

    This forum has been closed.
    Comment Sorting
    Comments
         
    by: Marcus Aurelius II from: NJ USA
    February 11, 2016 11:08 AM
    Is he being targeted for telling more lies about China's economy or for trying to tell the world the truth. What is the truth? From all indications, China's economy is in a grim state with no prospect of ever recovering. Everything that could go wrong has gone wrong. Even with energy it needs available in great abundance at very low cost, that is not helping. China's economy is based on exports and on getting or stealing other peoples' technology. Its market has dried up to the point where it can no longer prop its economy up with massive capital projects that are of no economic value and will yield no profits. The end for China is coming and there's nothing anyone can do about it.

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    Slow Rebuilding Amid Boko Haram Destruction in Nigeria’s Northeasti
    X
    June 29, 2016 6:15 PM
    Military operations have chased Boko Haram out of towns and cities in Nigeria’s northeast since early last year. But it is only recently that people have begun returning to their homes in Adamawa state, near the border with Cameroon, to try to rebuild their lives. For VOA, Chris Stein traveled to the area and has this report.
    Video

    Video Slow Rebuilding Amid Boko Haram Destruction in Nigeria’s Northeast

    Military operations have chased Boko Haram out of towns and cities in Nigeria’s northeast since early last year. But it is only recently that people have begun returning to their homes in Adamawa state, near the border with Cameroon, to try to rebuild their lives. For VOA, Chris Stein traveled to the area and has this report.
    Video

    Video Clinton Leads Trump, But Many Voters Don't Like Either

    In the U.S. presidential race, most recent polls show Democrat Hillary Clinton with a steady lead over Republican Donald Trump as both presumptive party nominees prepare for their party conventions next month. Trump’s disapproval ratings have risen in some recent surveys, but Clinton also suffers from high negative ratings, suggesting both candidates have a lot of work to do to improve their images before the November election. VOA National correspondent Jim Malone has more from Washington.
    Video

    Video New US Ambassador to Somalia Faces Heavy Challenges

    The new U.S. envoy to Somalia, who was sworn into office Monday, will be the first American ambassador to that nation in 25 years. He will take up his post as Somalia faces a number of crucial issues, including insecurity, an upcoming election, and the potential closure of the Dadaab refugee camp in Kenya. VOA’s Jill Craig asked Somalis living in Kenya’s capital city Nairobi how they feel about the U.S. finally installing a new ambassador.
    Video

    Video At National Zoo, Captivating Animal Sculptures Illustrate Tragedy of Ocean Pollution

    The National Zoo in Washington, D.C., is home to about 1,800 animals, representing 300 species. But throughout the summer, visitors can also see other kinds of creatures there. They are larger-than-life animal sculptures that speak volumes about a global issue — the massive plastic pollution in our oceans. VOA's June Soh takes us to the zoo's special exhibit, called Washed Ashore: Art to Save the Sea.
    Video

    Video Baghdad Bikers Defy War with a Roar

    Baghdad is a city of contradictions. War is a constant. Explosions and kidnappings are part of daily life. But the Iraqi capital remains a thriving city, even if a little beat up. VOA's Sharon Behn reports on how some in Baghdad are defying the stereotype of a nation at war by pursuing a lifestyle known for its iconic symbols of rebellion: motorbikes, leather jackets and roaring engines.
    Video

    Video Melting Pot of Immigrants Working to Restore US Capitol Dome

    The American Iron Works company is one of the firms working to renovate the iconic U.S. Capitol Dome. The company employs immigrants of many different cultural and national backgrounds. VOA’s Arman Tarjimanyan has more.
    Video

    Video Testing Bamboo as Building Material

    For thousands of years various species of bamboo - one of the world's most versatile plants - have been used for diverse purposes ranging from food and medicine to textiles and construction. But its use on a large scale is hampered because it's not manufactured to specific standards but grown in the ground. A University of Pittsburgh professor is on track to changing that. VOA’s George Putic reports.
    Video

    Video Orphanage in Iraqi City Houses Kids Who Lost their Parents to Attacks by IS

    An orphanage in Iraqi Kurdistan has become home to scores of Yazidi children who lost their parents after Islamic State militants took over Sinjar in Iraq’s Nineveh Province in 2014. Iraqi Kurdish forces backed by the U.S. airstrikes have since recaptured Sinjar but the need for the care provided by the orphanage continues. VOA’s Kawa Omar filed this report narrated by Rob Raffaele.
    Video

    Video Re-Opening Old Wounds in a Bullet-Riddled Cultural Landmark

    A cultural landmark before Lebanon’s civil war transformed it into a nest of snipers, Beirut’s ‘Yellow House’ is once again set to play a crucial role in the city.  Built in a neo-Ottoman style in the 1920s, in September it is set to be re-opened as a ‘memory museum’ - its bullet-riddled walls and bunkered positions overlooking the city’s notorious ‘Green Line’ maintained for posterity. John Owens reports from Beirut.
    Video

    Video Brexit Resounds in US Presidential Contest

    Britain’s decision to leave the European Union is resounding in America’s presidential race. As VOA’s Michael Bowman reports, Republican presumptive nominee Donald Trump sees Britain’s move as an affirmation of his campaign’s core messages, while Democrat Hillary Clinton sees the episode as further evidence that Trump is unfit to be president.
    Video

    Video NASA Juno Spacecraft, Nearing Jupiter, to Shed Light on Gas Giant

    After a five-year journey, the spacecraft Juno is nearing its destination, the giant planet Jupiter, where it will enter orbit and start sending data back July 4th. As Mike O'Sullivan reports from Pasadena, California, the craft will pierce the veil of Jupiter's dense cloud cover to reveal its mysteries.
    Video

    Video Orlando Shooting Changes Debate on Gun Control

    It’s been nearly two weeks since the largest mass shooting ever in the United States. Despite public calls for tighter gun control laws, Congress is at an impasse. Democratic lawmakers resorted to a 1960s civil rights tactic to portray their frustration. VOA’s Carolyn Presutti explains how the Orlando, Florida shooting is changing the debate.

    Special Report

    Adrift The Invisible African Diaspora