Date
4 December 2016
Economists say it is rare for a fast-growing economy to achieve the same growth quarter after quarter. Photo: Bloomberg
Economists say it is rare for a fast-growing economy to achieve the same growth quarter after quarter. Photo: Bloomberg

Economists raise doubts on China growth figures

Economists have raised doubts on the reliability of statistics released by China after officials said the economy grew 6.7 percent for the third consecutive quarter.

It is rare for a fast-growing economy to achieve the same growth quarter after quarter, the Wall Street Journal quotes economists as saying.

They note that China has been setting a hard economic target – 6.5 to 7 percent this year – and does what it takes to achieve it.

Such a system leads to excessive fiscal stimulus, which in turn fuels manufacturing overcapacity and debt, the newspaper said, citing remarks from the International Monetary Fund and economists.

“It’s quite implausible that growth would be 6.7 percent for three straight quarters,” Julian Evans-Pritchard, an economist with Capital Economics Pte, told the Journal.

“They’re obviously smoothing the data quite a bit” he said, adding: “Even by Chinese standards, this is a new level of stability.”

It appears that China’s growth data is being massaged by one or two tenths of a percentage point, which is worth about US$10 billion to US$20 billion in output, economists say, adding that going beyond that would arouse more suspicion.

“There always seems to be a tendency to round up rather than down,” the newspaper quoted IHS Markit Ltd. economist Brian Jackson as saying. “They tend to use something like the ‘other services’ category.

China’s National Bureau of Statistics has insisted that the methodology it uses is in line with accepted global standards.

The accuracy of China’s economic figures have been questioned by Chinese Premier Li Keqiang himself.

When he was party secretary of northeastern Liaoning province in 2007, Li was quoted in a leaked US cable decrying the accuracy of what he called “man-made” statistics.

He said then he relied on measures that were harder to manipulate, such as electricity output and freight traffic.

Earlier this month, President Xi Jinping warned government statisticians against manipulating economic data.

And late last year, local officials in Liaoning, Heilongjiang and Jilin provinces admitted doctoring gross domestic product statistics during anti-graft investigations, the Journal said, citing a report from the official Xinhua news agency.

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CG

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