Economy

Local officials may be playing fast and loose with GDP

(China Daily)
Updated: 2010-08-02 09:02

BEIJING - The total sum of China's regional GDP figures in the first half of this year was about 1.5 trillion yuan ($220 billion) more than the national figure released by the National Bureau of Statistics (NBS), a strong indication that there is false reporting by regional governments, according to analysts, officials and media reports.

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By Saturday, 29 of all the 31 provinces, municipalities and autonomous regions on the mainland had issued local GDP figures and GDP growth rates for the first six months of this year, with the exception of Shanghai and Guizhou province.

However, had Shanghai and Guizhou kept their GDP figures for 2009, the sum of their local GDP would surely have reached 18.8 trillion yuan, 1.5 trillion yuan more than the national GDP figure of 17.3 trillion yuan released by the NBS on July 15, the Beijing-based Mirror Evening News reported over the weekend.

Meanwhile, according to the local figures, GDP growth in 28 provinces, municipalities and autonomous regions remained higher than national GDP growth, which is 11.1 percent, the report said.

Reports of mushrooming local GDP figures have long been nettlesome. In the first half of 2009, for instance, the sum of provincial GDP figures stood at 1.4 trillion yuan - more than the national figure, calculated by the NBS independently. At the same time, nearly half of provincial governments reported double-digit GDP growth, whereas the national growth figure was only 7.1 percent.

The current GDP calculation mechanism asks local governments to calculate their own GDP before reporting it to the NBS for verification. For years, however, the sum of local GDP figures remained highly inconsistent with national figures.

Experts believe local government officials have long been deliberately inflating their own GDP figures in an effort to prove their strong stewardship of their economies.

Liu Yuanchun, a senior economist at the school of economics at Renmin University of China, said this phenomenon has been the inevitable result of a current political assessment mechanism - one which still depends greatly on local GDP performance to judge officials' ability.

In addition, reliable numbers can be acquired only if local statistical departments are totally independent, he said.

"If the statistical departments are under the management of local city or provincial government, how to guarantee the statistics are objective?" he said.

Beyond this, differences in accounting and standards adopted by national and local statistics departments are also to blame for these statistical inconsistencies, experts say.

China Daily - Xinhua