China's Stimulus and Dodgy Statistics

by Dollars and Sense

From The Guardian:

Too early to hail China's stimulus success

China may be on course to hit its annual economic growth target, but the official figures don't tell the full story

Zhang Hong
guardian.co.uk
Friday 28 August 2009 07.00 BST

It seems likely now that China will reach its annual economic growth target of 8%, dwarfing most of the other countries in the world. In the second quarter of 2009, its GDP growth spiked to 7.9%, from 6.1% in the first quarter. If all goes well, the Middle Kingdom will see its economic growth rise to an even higher rate in the remaining two quarters, making it one of the few countries still enjoying a nascent economic growth in spite of the severe impacts of the global financial crisis.

However, looking only at the handsome official figures and rushing to the simple conclusion that China's stimulus economic package has worked successfully would be wrong. In China, official figures don't always tell the true story. Furthermore, the economic growth curve might develop into a "W" shape, rather than the more exciting "V" shape. This means China's economy still faces the danger of nose-diving when the stimulus effects fade away.

Ma Jiantang, director of China's national statistics bureau, admitted recently that some official figures might not reflect the country's real situation. A large number of net users have also questioned the latest official figures on the country's residential average income, released by the bureau, while Ma admitted that the official surveys didn't cover those employed in the private sector. With more than 60% of Chinese residents employed by the private sector, this is a major omission.

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Labels: bailout, China, consumption, economic statistics, economic stimulus, financial crisis, Trade

 

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8/28/2009 11:24:00 AM