CHINESE WHISPERS - GETTING LOUDER AND MORE ACCURATE?
By Ruma Dubey
How much credence does one give to the data coming from the Govt? Not just the Indian Govt departments but from Govt agencies across the world. We have an inbuilt sense of faith when the word ‘‘Govt” comes in and somehow, mentally, we never doubt the figures.
Yet, when the baffling 81% growth in exports came in in July 2011 when ports were actually languishing and IIP numbers were down, we knew that something was amiss. It was only later that the Govt admitted that there was a fallacy is the data calculation. And before that, it was inflation. The rates were down while we were all paying much more than what we were a few years ago. That too, the Govt went on to change the base year, which hopefully, now gives us a better picture.
FIIs, when it comes to Indian Govt statistic releases, do not really voice doubt over its sanctity but when it comes to China, where all data is guarded behind the big wall, one does not really know the sanctity of those numbers. We take the numbers which the Chinese Govt gives and then probably draw our own inferences. China too makes mistakes in its data. In 2011, its Govt had reported the combined GDP of China’s 31 provinces about 4.6 trillion yuan higher than the nationwide number. This was later reported as an error, the size of which was as big as the economy of Indonesia. It is not that because China also reported an error it is ‘ok’ if India also does so. The moot point here is that of trust and accuracy.
And looks like China is trying to change that perception of doubt. In a surprise move, probably for the first time, China has come forth stating that its statistics agency will kick off a new system on Saturday to collect original data directly from businesses. This new system of data collection is being put in place to improve the accuracy of key indicators. This new system has been under development since 2009 – it will encompass 700,000 factories, property developers and department stores who will report their business numbers on a monthly basis to the National Bureau of Statistics (NBS). Till now, data was collected first by the municipal and provincial statistics agencies, which in turn went to the NBS. There was always the probability of the data getting corrupted. After all, we all are familiar with the game which one played in childhood – Chinese whispers, where the original data, when travelling from one person to many, ultimately emerges as something else. Thus to prevent the happening of this Chinese whispers, NBS will now get original data from firms and close the loopholes for local officials to alter numbers.
This is a dramatic development in Chinese statistics system since the past 60 years. Numbers which have come from China have often been labeled as ‘fudged’. This was done to naturally, show a growth rate which was not there but yet, keep the optimism going. This new system of data collection is thus expected to remove, to a large extent the ambiguity around Chinese data and become a more transparent country. That is the objective of the new system but one does not know about transparency and accuracy. Is NBS independent, with no interference from the Govt? Well, is there is anything like that in China? One does not know for sure if the new system will ensure that the world will have accurate data but is does show that China is trying to change its image as it gets more and more globally aligned.
Yes, Govt statistical data is sacred and if there is an error or deliberate tampering done there, it tantamount to blasphemy. Hopefully, the Govt’s will resist the temptation and not commit this sin. If the king gets immoral, it will be mayhem.