China fighting fake provincial statistics

Having a real picture of the country’s economy is necessary to ensure growth and social stability. About 278 officials have been punished while 787 companies were sanctioned. Local leaders manipulate data seeking promotions. The provinces’ “hidden” debt ranges between US$ 5.8 trillion and US$ 8.3 trillion. Li Keqiang is a critical of the situation.

Beijing (AsiaNews) – China’s central government has decided to tackle the provinces' often phoney and distorted economic data.

While the pandemic emergency still threatens growth and social stability, national authorities need an accurate picture of the local situation to formulate effective policies.

Official figures are almost always positive but often do not reflect the real situation in which small businesses and ordinary citizens find themselves.

Many observers, especially foreigners, have questioned the reliability of Chinese economic data. GDP, debt, employment and private income are the parameters most targeted by critics.

According to the South China Morning Post, China’s National Bureau of Statistics has carried two rounds of inspections in 12 provinces since September. As a result, 278 officials have been punished and 787 companies sanctioned for violating statistics regulations.

The main problem with data collection is that good economic statistics are usually the stepping stone for promotions. This is why local leaders tend to manipulate figures to benefit their careers.

A frequently cited case is that of provincial GDPs, which, when combined, usually outpace the national total.

For Chinese authorities, local corruption and high levels of debt in local administrations remain the main challenge to ensure political and social stability, especially as the Communist Party of China is set to renew Xi Jinping’s mandate as leader in 2022.

In 2020, China’s official public debt stood at 46 trillion yuan (US$ 7 trillion), about 45 per cent of GDP.

However, to this must be added the “hidden” debt of local administrations, estimated at between 40 and 53 trillion yuan (US$ 5.8 and US$ 8.3 trillion).

A year ago Prime Minister Li Keqiang ordered local leaders to "tell the truth" about the economic situation of the areas they administer, the only way to achieve the government’s goals of stimulating job creation, private spending, and increased investment.

Li has questioned the accuracy of the figures provided by local officials ever since he was party secretary in Liaoning (2004-2007).

To assess the provinces’ economic performance, he has always preferred to use "indirect" indicators such as electricity consumption, the volume of rail freight transport, and the amount of bank loans, which The Economist dubbed the “Li Keqiang Index”.

Last year Li shook the markets by admitting that 600 million people lived in China with a monthly income of 1,000 yuan, a figure that contradicts the government's narrative about the country’s 400 million middle-income consumers.

• china
• economics
• data
• statistics
• li keqiang
• reliability
• provinces
• poverty
• xi jinping