China's statistics chief warns against data massaging

BEIJING - Reuters

China’s statistics chief issued a sternly-worded notice on April 6 telling local government officials not to massage economic data after local media and an internal investigation uncovered a series of irregularities and distortions.

China’s National Bureau of Statistics (NBS), in charge of compiling and releasing key economic indicators, found that some local officials had forced firms to submit false industrial data to Beijing, said NBS chief Ma Jiantang.

The NBS launched a new system in February to collect data directly from 700,000 enterprises across the country in a bid to cut reliance on local officials who may be tempted to alter numbers to secure subsidies from Beijing, or win political promotion in a system that rewards overachievement.

Ma once said that the new system allowed companies to “just press the ‘submit’ button, and their numbers will be in our database.”

But local government officials have found ways to circumvent the new system. The NBS found in mid-March that the Hejin city government in northern Shanxi province instructed certain enterprises to report false numbers.

The 21st Century Business Herald, a Chinese-language newspaper, reported on April 6 that local governments from Yili in the remote northwestern Xinjiang region to Jian’ou in the southeastern coastal province of Fujian are trying to meddle in the new direct data reporting system.

In 2011, combined gross domestic product numbers reported by China’s 31 provinces were about 4.6 trillion yuan ($730 billion) higher than the nationwide number -an overstatement that is roughly as big as the size of Indonesia’s economic output.

The NBS cannot directly discipline local officials for wrongdoing, but its reports to regulators are typically followed by swift investigation and punishment from the authorities.