Outcry over fake data in China

Outcry over fake data in China
PHOTO: Outcry over fake data in China

BEIJING - Officials in the tiny county of Henglan in southern Guangdong province have been exposed for massively inflating the industrial output of 246 of its large firms last year.

Inspections of a sample of 71 among them showed that their actual output was overstated by nearly four times, the Statistics Bureau revealed on June 14.

It seemed like yet another case of officially made-up figures in China.

After all, data-massaging is a long-festering problem - suspected to taint everything from energy usage to exports - that has made even Premier Li Keqiang wary of taking China's GDP data at face value.

He once famously said that he relied on three indicators - electricity consumption, rail cargo volume and bank lending - to gauge the health of the Chinese economy.

But what was surprising was the widespread outcry from a few dozen state and local newspapers over the relatively small case.

"Falsifying statistics is also crime of corruption," proclaimed a headline in China.org.cn, a news portal under the State Council Information Office.

"Only when one knows shame can one become brave and have strength (to change)," declared the People's Daily.

In the vein of a "name and shame" campaign, the Communist Party's flagship newspaper detailed how the Henglan authorities had repented, apologised, fired the culprits and imposed new checks on data.

This unified media voice has led some to believe there may be a quiet push by the new leaders to get tougher on data manipulation.

Observers say the falsifications not only hurt China's and global investors' economic interests, but also obstruct the new leadership's ability to launch reforms at all levels.

President Xi Jinping and Premier Li recognise the need "to tackle outstanding problems like falsified data... (and inept) crisis management", using these as the entry point to deal with broader reforms, said Renmin University law professor Mo Yuchuan.

Analysts cite actions such as dispatch of statistics bureau teams to investigate data frauds in many other cities and provinces.

And there is talk of updating a "Statistics Law", last revised in 2000, to mete out more punitive measures and rules on data reporting.

Another factor behind the purge is the urgent need to know the true health of the world's No. 2 economy this year, say observers.

"Especially now, with the downturn of the Chinese economy and risks accumulating to a historic high, we pay even more attention to whether China is in for a hard landing and a financial crisis," said Beijing economics expert Liu Yuanchun.

"Fake statistics seriously mask the true answer to this question."

Although the central government had made little headway in the past in rooting out this endemic problem, the different approach of Premier Li might do the job this time.

"The new leaders are now emphasising quality of growth, not GDP or investment figures and other quantitative standards," said Central University of Finance and Economics professor Guo Tianyong.

This reduces the incentive for local officials to fudge statistics since their performance will be appraised on different things such as people's welfare, he explained.


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