China data integrity vital for confidence
- As Beijing restructures the economy, the importance of having accurate and precise information from across the country is critical
Accurate data is essential to economic and social policymaking. The reliability of statistics and financial information is a long-standing issue in China, which predates foreign speculation about fabrication prompted by the country’s rapid growth.
Beijing is cracking down on it, with the National People’s Congress (NPC) Standing Committee considering amendments to laws governing statistics and accounting that would greatly increase fines and the cost of violations. The question is why now?
The answer is to be found in the emphasis on upgrading and restructuring the country’s economy. To that end the central government will need to rely on more accurate and precise information if it is to make properly informed decisions about policy formulation, allocation of resources and so on.
Questioning of China’s economic data by foreign media and sometimes governments has often amounted to wild speculation that growth is exaggerated, or data massaged. But even Beijing may have questions about local data, amid concern that a local government will fabricate information for its own advantage.
There is little evidence Beijing has tried to centralise fabrication. Moreover, with China’s huge bureaucracy, manipulation of data risks provoking conflicting interests. The issue has also involved different methods of calculation, despite moves to standardise them about a decade ago.
Beijing sends inspection teams to monitor compilation of statistics and ensure a measure of verification. China is also one of the few countries actively exploring the use of technology, including blockchain bookkeeping, that would make it very difficult for individuals or local authorities to tamper with data.
The latest legislative drive is a continuity of this trend.
China looks to toughen penalties on fake data to stem ‘persistent fabrication’
That said, if Beijing is concerned data will cause embarrassment or public panic, it is under no political pressure to publish it. Take, for example, the temporary suspension of the publication of figures on soaring youth unemployment during a review of the methodology used.
Ultimately, however, the integrity of data on China’s massive economy is paramount to public confidence and to policymaking both at home and by foreign governments.
