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Officials setting too great a store on GDP growth figures

(Xinhua)
Updated: 2009-08-13 16:13

Some of China's local officials still set too great a store on gross domestic product (GDP) growth figures, which could lead to unreliable reporting of data, said Xu Guangjian, a professor at the prestigious Renmin University of China, Wednesday.

Xu, vice president of the university's School of Public Administration, was commenting on the divergence between China's national and local-level GDP growth figures for the first half of the year, a topic being paid a great deal of attention.

The National Bureau of Statistics (NBS) said on July 16 that the country's GDP grew 7.1 percent year-on-year in the first half to 13.99 trillion yuan ($2.05 trillion).

However, the aggregate GDP figure of the latest released data at province level nationwide was 1.4 trillion yuan more than the 13.99 trillion, or about 10 percent higher, which has aroused concern statistics from some areas are unreliable.

Governmental data showed that when provinces, autonomous regions and municipalities nationwide reported their first-half economic statistics, 24 localities' GDP growth rates were greater than the national average and one locality was on a par with the national level.

Related readings:  GDP growth not at cost of public health  China's H1 GDP sees a 1.4t yuan gap with local govts  Shanghai GDP growth lags in H1  NBS official refutes charges of unreliable GDP figure

Northern Tianjin municipality and Inner Mongolia autonomous region figures were the highest. They both posted 16.2 percent growth in six months.

Only five provincial areas, including export powerhouses Shanghai and Zhejiang, did not reach the national 7.1 percent level, which is attributed to the global economic downturn.

China had set an overall goal of 8 percent GDP growth for the whole year.

GDP-oriented mindset

Yang Yongshan, former chief statistician of Shaanxi Provincial Bureau of Statistics, said it was possible that the national and local aggregate figures were not in accordance, but it was not reasonable local figures were higher year after year than the national.

"Much data is collected and analyzed by the NBS itself, and its figure is more accurate," Yang said.

He said some local officials were still in the habit of trying to keep up with others by posting higher GDP growth figures.

Experts also said that the national GDP figure was not "a simple adding-up" and shared the view some local officials paid more attention to GDP growth rate partly because the figure was crucial to their performance assessment and consequent promotion, so they aimed to "create" a high GDP growth rate.

Xu said officials had rid themselves of the high GDP growth-oriented mindset, as economic development was misunderstood by them to showcase faster growth rates. 

More focus on social well-being, data authenticity

Cai Zhizhou, an economist with Peking University, said people in developed economies cared more about data on their social well-being such as employment and the consumer price index (CPI).

"In assessing local officials' performance, we should not lay too much stress on GDP growth rate, but also care for areas related to social well-being, including improving the employment rate," Cai said.

The registered unemployment rate in Chinese urban areas reached 4.3 percent at the end of June. This was unchanged from the end of March, but slightly up from 4.2 percent at the end of 2008, again attributed to the global financial crisis not yet bottoming out.

Analysts said GDP growth rate was a key figure in the central government's judgment of the overall economic situation, and the data's authenticity was instrumental in helping central government to formulate macroeconomic management policies.

"If local governments only pay attention to GDP growth rate, they put energy and resources into projects to create its best growth effect. This is not conducive to long-term economic restructuring and improving the government's public services," Xu said.

Experts say stress on recording high GDP growth locally was like trying to make a cake bigger, but it did not mean the cake was more tasty.