Discrepancies in GDP figures raise concern

One plus one is two. But such is not always the case when one is calculating local and national GDP data in China.

After the National Bureau of Statistics on Monday unveiled economic data for 2013, what caught the most attention was not only the 7.7 percent annual growth figure, but also a peculiar math problem.

China's GDP amounted to 56.9 trillion yuan ($9.4 trillion) in 2013. However, the total of the provincial GDP figures, which were independently calculated and released, was about 2 trillion yuan more than the 56.9 trillion yuan that the NBS arrived at, even though three of the 31 localities that had not yet released their totals were not included.

This has aroused suspicion among netizens that some growth-obsessed local officials have cooked the books.

Actually, the combined economic output of China's provinces has routinely exceeded the national total compiled by the NBS.

For 2011, the aggregate GDP figure of all localities was 4.6 trillion yuan more than the NBS tally of 47.1 trillion yuan. In 2012, the aggregate figure was 5.76 trillion yuan higher than the total of 51.93 trillion.

Double counting

Officials and experts attributed the discrepancies mainly to overlapping calculations among different regions.

Zhang Liqun, researcher at the Development Research Center of the State Council, said overlapping calculations often occur when a big company has many subsidiaries. In this case, the added value of the subsidiaries tend to be calculated twice.

An official at the country's top economic planning body, the National Development and Reform Commission, echoed that view at a news conference on Wednesday, saying that the existence of a large amount of transregional economic activities might cause duplicated calculations.

Unlike the calculation of the nations' GDP, when you have customs to clearly define the attribution of added value, it is difficult to define which part of added value belongs to which provinces in the case of trans-regional economic activities, said Cong Liang, deputy head of the NDRC's department of national economy.

GDP obsession

In addition to double calculation and price differences, experts pointed to the so-called GDP obsession of local officials as another key factor for the gap between national and local data.

"It is possible that the national and local aggregate figures are not in accordance, but that is not reasonable if local figures are higher year after year than the national, and never go in the other direction," said Yang Yongshan, former chief statistician of the Shaanxi Provincial Bureau of Statistics.

Yang said data collected and calculated by the NBS are relatively accurate, while some local officials, under the pressure of "performance evaluation", tend to try to keep up with others by setting higher GDP growth targets.

Chinese leaders have recently set new standards for local officials, stressing that their performance cannot be simply based on regional GDP growth rates, but should also include resource and environmental costs, debt levels and work safety.

However, it is still difficult for some officials to change their mindset and stop placing too much emphasis on GDP growth figures.

'Not a big error'

Cong downplayed the importance of the data discrepancy, saying that the 2 trillion yuan accounted for only about 5 percent of the total, and it not a big error when compared to the total.

However, experts said that if the gap between local and national GDP data continues, the credibility of the country's statistics will suffer, and the government might be misled to make wrong judgments about policy effects and macroeconomic conditions.

China will unify the way it calculates provincial economic output to help close the gap with national figures, NBS chief Ma Jiantang said earlier this month.

Ma also promised to fight the reporting of fake data. In 2013, the NBS investigated nine cases of false reporting and held 57 statistics staff accountable.