By Ding Qi (China Daily)
Updated: 2007-08-03 17:49

The difference in GDP estimation between the nation's statistic institute and local governments is unbelievably huge, the Shanghai Securities News reported on Thursday.

According to data released by the National Bureau of Statistics (NBS) last month, China's gross domestic product (GDP) in the first half of this year reached 10.67 trillion yuan(US$1.41 trillion). However, adding up GDP figures of provincial governments yields an extra 1.24 trillion yuan.

The gap is about half the combined production of Bejing, Shanghai, Tianjin and Chongqing in a year, the report said.

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Flourishing economic cooperation among different provinces could be one reason for the disparity, the report said. Some local governments, intentionally or unintentionally, performed repeated calculations by including mutual investment and trade in their production reports.

"Regional economic cooperation has made it more difficult for provinces to figure out how much a project contributed to local production," said Zhao Yanyun, associate professor at the Renmin University of China.

In addition, calculation of GDP by regional statistics organizations requires assistance from local governments, yet many government officials pursue economic growth as a political achievement. They sometimes seize the opportunity to interfere with statistics work, and accuracy suffers, according to Zhao.

Moreover, due to the difference in data sources and calculation methods, there can be some inconsistency between the national GDP calculation and local ones, said Qi Jingmei, senior economist with the National Information Center.

The comment was also echoed by Zhao, who said the NBS figure is more reliable. This is because the NBS has the advantage of access to data from high-level departments like the Ministry of Railways and the central bank, which measure overall growth of those industries.

Zhao said the NBS was also promoting a new GDP calculation system in order to eliminate disparities. Under the new system, the central government will calculate the nation's GDP directly based on the provincial figures. As for those controversial data, the NBS will made spot checks to verify the figures.