Lies, damned lies and Chinese statistics

First come lies, damned lies, and statistics. And then, in the brave new world of "Socialism with Chinese characteristics", one reaches the challenging domain of "Chinese statistics".

Fiddling the figures has become an irresistible temptation in China. There is even a statistic to prove it; in the last seven months of 1994, a survey uncovered 70,000 fraudulent statistics, of which 20,000 involved "blatant falsification" of government reports. This has not prevented Peking being chosen as the city to host next month's fiftieth International Statistics Conference

For China's economic planners, all this unreliable data is a problem. "Seek truth from facts," exhorted Deng Xiaoping. The trouble is pinning down reliable facts in such a huge country; there is always the suspicion that dubious local data may distort the national figures. This year the key policy targets are for sharp reductions in inflation and economic growth. Statistics published last week showed considerable success; the consumer price index in June was up 18.2 per cent on a year-on-year basis, well down from 1994's 24.1 rise, while gross domestic product growth averaged 10 per cent in the first six months compared with the same period last year. But the question troubling Western analysts is how dependable are such statistics.

Aside from the practical difficulties of adapting a vast, old-style centrally- planned economy to modern accounting demands, there is the problem of wilful distortion. Zhang Sai, Director of the State Statistical Bureau, recently admitted: "Cheating is something of a problem." He spoke of an "unhealthy trend" for some local governments and officials to report "grossly inflated" figures for industrial production, grain reserves and farmers' net income. Others have underestimated population growth, fixed-asset investment and price rises, he said.

Nor are cheats subtle when massaging the figures. Mr Zhang cited Anyang county in Henan province which exaggerated the output of rural enterprises by more than a quarter. The county's reported output from 26 large enterprises was nearly 50 per cent higher than the accurate amount. Hebei provincial government at the beginning of the year uncovered 116 cases of serious misreporting. It is all reminiscent of what happened during the Great Leap Forward in 1958 when communes were faced with impossible targets for grain and steel production - and faked the figures to avoid recriminations.

Officials insist they have devised effective methods for ensuring that national and provincial figures are reliable by screening aberrant components. But there are more fundamental questions about the way national statistics are assembled.

One diplomat pointed out that the year-on-year inflation data stopped tallying with the month-on-month figures after November last year - the point at which year-on-year inflation apparently started to fall.

Peking hit back saying the two sets of data were calculated according to different "baskets" of goods and services, and should not be expected to match. The lower figures, Peking argued, were definitely more accurate.