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

    Top US General: Turkish Media Report ‘Absurd'

    General Dunford rejects ‘irresponsible' claims of coup involvement by former four-star Army General Campbell, who led NATO forces in Afghanistan before retiring earlier this year

    Video Saving Ethiopian Children Thought to Be Cursed

    'Omo Child' looks at efforts of one African man to stop killings of ‘mingi’ children

    Protests Over Western Troops Threaten Libyan 'Unity' Government

    Fears mount that Islamist foes of ‘unity' government plan to declare a revolutionaries' council in Tripoli

    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.
    London’s Financial Crown at Risk as Rivals Eye Brexit Opportunitiesi
    X
    VOA News
    July 25, 2016 5:09 PM
    By most measures, London rivals New York as the only true global financial center. But Britain’s vote to leave the European Union – so-called ‘Brexit’ – means the city could lose its right to sell services tariff-free across the bloc, risking its position as Europe’s financial headquarters. Already some banks have said they may shift operations to the mainland. Henry Ridgwell reports from London.
    Video

    Video London’s Financial Crown at Risk as Rivals Eye Brexit Opportunities

    By most measures, London rivals New York as the only true global financial center. But Britain’s vote to leave the European Union – so-called ‘Brexit’ – means the city could lose its right to sell services tariff-free across the bloc, risking its position as Europe’s financial headquarters. Already some banks have said they may shift operations to the mainland. Henry Ridgwell reports from London.
    Video

    Video Recycling Lifeline for Lebanon’s Last Glassblowers

    In a small Lebanese coastal town, one family is preserving a craft that stretches back millennia. The art of glass blowing was developed by Phoenicians in the region, and the Khalifehs say they are the only ones keeping the skill alive in Lebanon. But despite teaming up with an eco-entrepreneur and receiving an unexpected boost from the country’s recent trash crisis the future remains uncertain. John Owens reports from Sarafand.
    Video

    Video Migrants Continue to Risk Lives Crossing US Border from Mexico

    In his speech Thursday before the Republican National Convention, the party’s presidential candidate, Donald Trump, reiterated his proposal to build a wall along the U.S.-Mexico border if elected. Polls show a large percentage of Americans support better control of the nation's southwestern border, but as VOA’s Greg Flakus reports from the border town of Nogales in the Mexican state of Sonora, the situation faced by people trying to cross the border is already daunting.
    Video

    Video In State of Emergency, Turkey’s Erdogan Focuses on Spiritual Movement

    The state of emergency that Turkish President Recep Tayyip Erdogan has declared is giving him even more power to expand a purge that has seen an estimated 60,000 people either arrested or suspended from their jobs. VOA Europe correspondent Luis Ramirez reports from Istanbul.
    Video

    Video Calm the Waters: US Doubles Down Diplomatic Efforts in ASEAN Meetings

    The United States is redoubling diplomatic efforts and looking to upcoming regional meetings to calm the waters after an international tribunal invalidated the legal basis of Beijing's extensive claims in the South China Sea. VOA State Department correspondent Nike Ching has the story.
    Video

    Video Four Brother Goats Arrive in Brooklyn on a Mission

    While it's unusual to see farm animals in cities, it's become familiar for residents of Brooklyn, New York, to see a little herd of goats. Unlike gas-powered mowing equipment, goats remove invasive weeds quietly and without adding more pollution to the air. As Faiza Elmasry tells us, this is a pilot program and if it proves to be successful, the goat gardener program will be extended to other areas of New York. Faith Lapidus narrates.
    Video

    Video Scientists in Poland Race to Save Honeybees

    Honeybees are in danger worldwide. Causes of what's known as colony collapse disorder range from pesticides and loss of habitat to infections. But scientists in Poland say they are on track to finding a cure for one of the diseases. VOA’s George Putic reports.
    Video

    Video Wall Already Runs Along Parts of US-Mexico Border

    The Republican Party’s presidential nominee, Donald Trump, gained the support of many voters by saying he would build a wall to keep undocumented immigrants and drugs from coming across the border from Mexico. Critics have called his idea impractical and offensive to Mexico, while supporters say such a bold approach is needed to control the border. VOA’s Greg Flakus has more from the border town of Nogales, Arizona.
    Video

    Video New HIV Tests Emphasize Rapid Results

    As the global fight against AIDS intensifies, activists have placed increasing importance on getting people to know their HIV status. Some companies are developing new HIV testing methods designed to be quick, easy and accurate. Thuso Khumalo looks at the latest methods, presented at the International AIDS conference in Durban, South Africa.
    Video

    Video African Youth with HIV Urge More Support

    HIV, the virus that causes AIDS, is the top killer of teens in sub-Saharan Africa. But many youths say their experience with the virus is unique and needs to be addressed differently than the adult epidemic. VOA South African Correspondent Anita Powell reports.
    Video

    Video Pop-Up Art Comes to Your Living Room, Backyard and Elsewhere

    Around the world, independent artists and musicians wrestle with a common problem: where to exhibit or perform? Traditional spaces such as museums and galleries are reserved for bigger names, and renting a space is not feasible for many. Enter ArtsUp, which connects artists with venue owners. Whether it’s a living room, restaurant, office or even a boat, pop-up events are bringing music and art to unexpected places. Tina Trinh has more.
    Video

    Video Scotland’s Booming Whisky Industry Fears Brexit Hangover

    After Britain’s vote to leave the European Union, Scotland’s government wants to break away from the United Kingdom – fearing the nation’s exports are at risk. Among the biggest of these is whisky. Henry Ridgwell reports on a time of turmoil for those involved in the ancient art of distilling Scotland’s most famous product.

    Special Report

    Adrift The Invisible African Diaspora