Economy

China to improve GDP calculation methods

By Wang Xiaotian (China Daily)
Updated: 2010-01-30 08:57

Local officials often inflate figures, causing unreliable data

China could wave goodbye to its GDP data discord as the national statistics bureau chief claims that he will unify provincial and central GDP calculation methods and improve grassroots statistical quality this year.

Ma Jiantang, head of the National Bureau of Statistics (NBS), has criticized some local officials who inflate the GDP figures they report to the NBS. The problem has affected the nation's statistical credibility and produced disunity between central and provincial data, Ma said.

The aggregate of the GDP figures reported by local governments reportedly is often larger than the overall national figure released by the NBS, arousing concerns that the local governments may have rigged the statistics to show how capable they are of managing local economy.

The new move by NBS is expected to change that, at least partially.

"That's a positive signal for macro economic analysis," said Cai Zhizhou, director of National Economic Accounting and Economic Growth Research Center at Peking University. Data accuracy, credibility and cohesion would be improved a lot if the central government can count provincial economic growth indexes directly, he said.

The statistics matter because they have a crucial bearing on the country's macroeconomic policies, Ma said at the national statistics conference on Jan 28.

According to the bureau, in the first half of 2009, the sum of provincial GDP figures exceeded the national GDP figure, calculated by the bureau independently, by more than 1.4 trillion yuan, or about 10 percent of the total GDP. In 2004, the difference was 3 trillion yuan, or 19.3 percent of the national GDP that year, which was the biggest gap in history.

Ma said that some provinces reported 18 to 20 percent year-on-year GDP growth amid the country's economic slowdown in 2009. This has raised an alarm for statisticians, because the national GDP growth in that year was only 8.7 percent.

China will release quarter-on-quarter growth data this year, which will help monitor the economy's short-term growth trend more effectively, Ma said.

"The unification and quarter-on-quarter growth data to be released will lay a foundation for making statistics more transparent, which is crucial for economic analysis and prediction," said Zhou Mingjian, an analyst with Pacific Securities.

He predicted regional economic growth data would show some declines as the central government begins to enforce the accounting rules, but the national GDP won't be affected noticeably.

But some analysts warned that if the country pays too much attention to GDP growth and continues to judge local officials' performance on local GDP growth, the problem of statistical inaccuracy would remain difficult to solve.