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Local Exaggeration in GDP: 5.8Trl Higher than Central Data

02-04 18:46 Caijing
Chinese officials have a strong incentive to embellish the economic data with GDP a key index to assess officials' political performance in the country.

Chinese local governments, as they've done for years, reported stronger GDP data when combined together than the central government, cementing the public's doubt over the credibility of official Chinese data.

Chinese officials have a strong incentive to embellish the economic data from regions under their governance with GDP a key index to assess officials' political performance in the country.

According to a host of figures released recently by local governments, GDP in all provinces (districts and cities) across China added up to 57.69 trillion yuan in 2012, compared with a preliminary reading of GDP of 51.93 trillion, which was compiled by the National Bureau of Statistics.

The so-called "GDP fight" in Chinese between central and local governments has started since 1985, when a twin-track approach of accounting the economic output was first used among different levels of governments. There are also signs of widening gap between the local-combined data and the central data, from 2009's 2.68 trillion to 2010's 3.2 trillion, and 4.6 trillion in 2011, despite repeated condemnation from the central government over accounting irregularities.

The NBS, alongside legal authorities, has launched a nationwide campaign to "resolutely curb statistical frauds". In March 2012, the NBS reported several cases of such irregularities by local officials in a rare move to display its resolution, along with sharp criticism from Ma Jiantang, head of the NBS.

Mr. Ma has said he is considering a "unified accounting method" to won some credence for the country's economic data. The reform, following the launch of an initial package, has gone nowhere so far.

Previous data released by local governments pointed to a strong GDP growth in 2012 in the world's second-biggest economy. For the first time, per capita GDP in East China's Zhejiang and Jiangsu provinces as well as North China's Inner Mongolia Autonomous Region surpassed 10,000 U.S. dollars in 2012, putting them at a level close to a developed economy.

 

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