CAMBRIDGE, England -- It is that time of year again when statisticians in Beijing have to decide how fast the Chinese economy grew in the last year. Or rather, not so much how much it grew but how much they are going to claim it grew. More so than anywhere else the figures for growth in gross domestic product.
GDP figures are highly political because they are used to define how well the Chinese Communist Party is doing in managing the economy, especially for measuring how fast China is catching up with the United States. Indications are that the statisticians are going to look into their box and come up with a figure somewhere between 8 percent and 8.2 percent. This is not as much as at the height of the reform and opening-up process, but it does mark a recovery over last year's 7.8 percent and a reversal of the slowing down in growth over the last few years. There are, however, good reasons to doubt China's GDP data.
I recall sitting with a couple of government statisticians in Beijing a few years ago. I asked them how they decided on what growth figures to announce. After some nervous laughter they said that they took the figure the party had announced at the target growth-rate for the year and their assessment of actual growth and then made a political judgment of where in the range between the two would be the politically acceptable rate to call. I was reminded of this last week at a high-level meeting called by a British government department to discuss the state of the Chinese economy. The question of the reliability of China's GDP data came up at this meeting. A senior representative of a leading Chinese state financial-institution expressed surprise that anyone took the data at face value. His institution, he said, always discounted the published figures by 2 to 2.5 percent.
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