China Starts Probe to Ensure Accuracy of Economic Data
China said it will start an investigation to ensure the accuracy of data filed by companies as part of efforts to improve the reliability of statistics in the world’s second-largest economy.
There is an urgent need to prevent fraud in data submission, National Bureau of Statistics head Ma Jiantang was cited by China Information News today as having said on June 24. Those found submitting inaccurate information for major statistics may be “severely punished,” the newspaper, published by the bureau, reported without citing anyone.
China’s government is struggling to win the trust of investors and economists for its data, with exports and imports among the latest indicators to be scrutinized on concerns fake invoices inflated numbers. Li Keqiang, who became premier this year, said in 2007 that gross domestic product figures were “man-made” and “for reference only,” according to a WikiLeaks cable published in 2010.
“The problem is pretty pervasive and rather systemic,” said Zhang Zhiwei, chief China economist at Nomura Holdings Inc. in Hong Kong. “I don’t expect a dramatic change in terms of data quality. There will be improvement but it will take time.”
Ma, in an open letter posted on the bureau’s website yesterday, asked companies to file data “truthfully and completely.” Some local governments were found to have intervened in companies’ filing process, and the bureau will increase penalties on those who commit fraud in statistics submission, the letter said.
The statistics bureau has been improving data methodology and collection to provide more reliable figures for policy makers. In February 2012, it started using a unified system to directly collect output, retail sales and investment data from 700,000 companies to boost accuracy and reduce manipulation by local authorities.
An unprecedented run of better-than-forecast export growth published by the General Administration of Customs earlier this year spurred skepticism of the data at banks including Goldman Sachs Group Inc. Export gains last month were at a 10-month low and imports dropped after a crackdown on fake trade invoices used to disguise money inflows.
The statistics bureau exposed inflated data on industrial output in Henglan town in southern Guangdong province, according to a June 14 report by the state-run Xinhua News Agency. The bureau said in March 2012 that officials in Hejin city in northern Shanxi province gave companies “seriously untrue” numbers to submit for 2011.
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