3 Jun, 2013
Pilot reform to improve China’s data credibility
Shanghai, 2013-06-01 – The central government’s fixed-asset investment reform trial in four regions across the nation will greatly improve the credibility of the nation’s economic indictors, an expert said on Friday.
“Fixed-asset investment plays a key role in driving China’s economic growth, so working on the pilot reform of fixed-asset investment and ensuring accuracy of the data is significant for improving our country’s ability to exercise macro control,” said Ma Jiantang, head of the National Bureau of Statistics, at a meeting in Xi’an, Shaanxi province.
Ma added that to reflect China’s fixed-asset investment situation more accurately, the existing system will be revamped.
He said the reform will go in two directions: to shift the investment calculation targets from projects to legal entities; and to change the investment amount calculation method, from an evaluation to actual expenditure.
Four places have been chosen to launch the pilot scheme: Jinchen in Shanxi province, Xi’an in Shaanxi province, Wuxi in Jiangsu province, and Qiandongnan Miao and Dong autonomous prefecture in Guizhou province.
“It is just a matter of time before changes are made to China’s current calculation method, especially the figures for fixed-asset investment, which are regarded as inaccurate,” said Lu Zhengwei, chief economist with Industrial Bank.
Lu Ting, an economist at the Bank of America Merrill Lynch in Hong Kong, was quoted by Bloomberg as saying on Friday that the biggest problem with China’s investment data is “double counting, which makes investments look bigger than they really are”.
“The current statistics don’t really give us an accurate measure of what’s really going on in the economy for the purposes of macroeconomic policy,” added Lu.
China’s actual trade surplus figure in the first four months of the year has been claimed to be only about one-tenth of the official $61 billion.
The discrepancy in the official data has been blamed on large amounts of hot money being smuggled into the country to profit from interest rate differentials and investments in the real estate and financial sectors amid the yuan’s appreciation.
An anonymous source with the General Administration of Customs admitted that export data for the first four months were also inflated, which was caused by abnormal shipments to Hong Kong, with the surge in gold imports and exports also to blame.
Lian Ping, chief economist at Bank of Communications, added that the real trade surplus in the first four months was surely not as high as indicated by the official figures, as the alleged fast export growth was not matched by other economic indicators, including power output, power consumption, factory production and employment levels in the manufacturing sector.
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