China Is under Pressure to Clean Up Its Statistics Foreign Investors See Need for More Accurate Data on Country's Booming Economy

Article excerpt

AFTER years as the ultimate spin doctors, China's statisticians are confronting new demands: credibility and accuracy.

Since the Communist Party came to power in 1949, government number-crunchers have manipulated, colored, and even buried data to serve volatile political masters and to justify a collapsing central planning system. The decade-long Cultural Revolution, a period when data-gathering was abandoned as "unscientific," left a statistical black hole in history that cannot be filled.

But with the planned economy retreating before an emerging capitalist marketplace, and foreign investors and forecasters demanding to know more about the world's hottest economy, China faces new pressure to clean up its reputation for statistical deceit and legerdemain.

Despite its bureaucratic army of 2 million data-gatherers, China exists in a statistical fog in which information is hidden and hard to come by. Public and private research institutes have mushroomed as Western firms such as the Gallup Organization open shop in China. The State Statistical Bureau, for years the bastion of closely held economic information, has established a marketing research subsidiary that compiles an industrial data base. Its clients include AT&T, Proctor & Gamble Company, and Amoco Corporation.

The bureau is moving from outdated socialist accounting to econometrics and other Western methods; it has hired Western economists as consultants and is soliciting joint ventures in the United States, Britain, and Hong Kong to market its economic information overseas.

People's Daily, the official Communist Party organ, says the government is moving closer to international accounting practices by focusing more on investment, profits, pricing, and production.

To burnish its credibility and boost Beijing's ability to manage the national economy, the government last month announced a crackdown on statistical fraud among provinces and localities. Since the center reinstated data research after economic reform was launched 15 years ago, local statistical bureaus have systematically inflated data to win Beijing's approval, or underestimated statistics to receive more government funding.

FACING a wave of official corruption and growing rebelliousness among provinces anxious to chart their own economic futures, Zhang Sai, the bureau director, warned that distorted statistics are increasing tensions between Beijing and localities. …

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