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Outmoded statistics

(China Daily)
Updated: 2009-04-11 08:13

If rising public skepticism about statistics means anything, statistical officials should immediately update their data collection and analysis methods to better reflect reality.

Widespread public doubt about inflated salary figures for 2008 has brought the credibility of China's statistics officials into question once again.

The latest numbers the National Bureau of Statistics (NBS) has cranked out aren't necessarily wrong, but officials' refusal to adopt a more representative methodology has made them increasingly difficult to sell.

While the global financial crisis has made more and more people worried about their jobs, the NBS announced that urban residents' average gross salary in 2008 rose 17.2 percent to 29,229 yuan (US$4,280), up 4,297 yuan on 2007.

Impressive are both the average salary level and its strength in growth as the national economy has slowed down since late last year.

But they seem to contradict sharply with the perception of most people who have more or less felt the pinch of the slowdown.

The survey failed to cover private enterprises or individual businesses, and average salaries were calculated before taxes and insurances were paid.

These two factors may well explain the conceptual gap between the public and the NBS about real income level.

While the country is going all out to boost domestic consumption into a major growth engine, an accurate grasp of the people's real purchasing power is intrinsic to the efficacy of government policies.

How can fiscal subsidies stimulate consumption if workers' disposable income is far less than what policymakers have been made to believe?

Unfortunately, the salary levels statistical officials came up with are simply of little relevance to, if not misleading about, urban residents' real purchasing power.

By including all kinds of non-disposable income, the official average salary says nothing about real income level.

Moreover, by excluding all-important private enterprises and the self-employed, the current statistical method seems as antiquated as the old economic system.

These incomplete statistics are hardly of any use to policymakers charged with boosting domestic consumption.

It is therefore high time a new statistical method that can provide meaningful information to decision makers and the public was introduced.

(China Daily 04/11/2009 page4)