beyondbrics

One of China’s longer-standing economic controversies has erupted again. All 31 provincial-level jurisdictions have reported their 2011 GDP figures and the results are unbelievable in the original meaning of that word – as in, not able to be believed.

Of the 31 growth rates, 28 were faster than China’s overall expansion of 9.2 per cent. Chinese media have pounced on this discrepancy to question the reliability of official economic data. That’s not entirely fair.

Ma Jiantang, head of the national statistics bureau, acknowledged this week that local government numbers are about 10 per cent higher than central figures on average. Critics suspect that cities and provinces might be inflating their numbers to appear to be performing better.

But Ma said the main reason was technical: the double-counting of output. While it is easy to track imports and exports across national borders, monitoring the flow of goods across porous provincial borders is effectively impossible. The result is that the value of components made in, say, Guangdong and assembled in Hunan into a final product will be counted towards both provinces’ growth figures rather than just Guangdong’s.

This problem does not actually mar China’s statistics at the national level. The statistics bureau in Beijing sends its own teams of researchers down to the provinces to collect data, limiting its reliance on local governments.

Ma vowed to develop a more unified, web-based data system to improve the quality of local data.

Wu Xiaoling, a former vice president of the central bank, had an even more radical suggestion:

“We should halt the calculation of local GDP, because there is no way to eliminate inter-provincial double-counting and it has a very negative impact on the trustworthiness of government data.”

For what it’s worth, here are China’s provincial-level GDP numbers for 2011. The three laggards who finished below the national rate? Beijing, Shanghai and Zhejiang.

• Anhui 13.5%
• Beijing 8%
• Chongqing 16.4%
• Fujian 12.2%
• Gansu 12.5%
• Guangdong 10%
• Guangxi 12.3%
• Guizhou 15%
• Hainan 12%
• Hebei 11%
• Heilongjiang 13%
• Henan 11.7%
• Hubei 13.5%
• Hunan 13%
• Inner Mongolia 15%
• Jiangsu 11%
• Jiangxi 12.5%
• Jilin 14%
• Liaoning 12%
• Ningxia 12%
• Qinghai 13.5%
• Shaanxi 13.8%
• Shandong 10.9%
• Shanghai 8.2%
• Shanxi 13%
• Sichuan 15%
• Tianjin 16.4%
• Tibet 12.6%
• Xinjiang 12%
• Yunnan 13.7%
• Zhejiang 9%

Related reading:
China’s GDP: no easy leading indicator, beyondbrics
Book review: Chinese official statistics – fact or fiction? beyondbrics
China: the case of the missing inflation, beyondbrics