Today’s example of the inscrutable mystery of China’s economic statistics

When the subject turns to China, everybody gets not only their own opinions, but their own facts.  Is China booming or crashing?  Since the government data is not trusted, people look to private sources — which often adds to the confusion.

BusinessWeek, 11 May:

“China’s property prices rose by a record 12.8% in April from a year earlier, defying government measures to stem gains and cool speculation.  The increase, which was posted on the National Bureau of Statistics website, topped an 11.7% jump in March that was the highest since the survey of residential and commercial prices in 70 cities started in 2005”

CapitalVue, 11 May (note the % change is given to four significant digits, which is a bit much):

The average transaction price of commercial residential properties in Beijing for the week ended May 9 fell 1,790 yuan per square meter or 9.6% week-on-week to 16,898 yuan per square meter, reports The Beijing News, citing statistics released by Beijing Real Estate Information Network.

Compared with the week ended April 11, the average transaction price of commercial residential properties in Beijing plunged 31.43% to 7,744 yuan per square meter.

In the last weeks of April, the transaction volume of commercial residential properties in Beijing decreased by 10.34% , 11.39% and 30.82% respectively. Average transaction price was flat at between 22,000 yuan to 23,000 yuan per square meter.

The Beijing Real Estate Information Network source gives 4 week change for Beijing of -34% (April 11 to May 9).  China’s government says national prices rose year-over-year from 11.7% in March to 12.8% in April.  No way these can both be true.

I suspect the first is correct.  Loud alarms would ring if prices in a large city — or the capital — fell by 1/3 in just one month.  We wouldn’t need this private firm to tell us.  Imagine the reaction if this happened in NYC or Washington DC.  But that’s just my guess.

One thought on “Today’s example of the inscrutable mystery of China’s economic statistics

  1. China Is a Black Box of Misinformation“, Junheng Li, Bloomberg 23 May 2012 — Opening:

    To this day, many Chinese people believe that Mao Zedong didn’t know millions of people were starving in the Great Leap Forward.

    The agricultural production statistics were all rosy, a testament to the success of his new economic policy, while hordes of hungry masses migrated from province to province, chasing false reports of bumper crops. Thirty million or so people starved, in no small part because of the manipulation of economic data.

    Half a century later, China has the second-largest economy in the world, and the country has lifted about 400 million people out of poverty. The magnitude and speed of urbanization are unprecedented in the history of human civilization.

    I am proud of what China has done for its people since the introduction of state capitalism in the 1980s. Gross domestic product has quadrupled in the past decade, from $1.2 trillion in 2000 to almost $6 trillion in 2011. But as a China native and a U.S.-trained investor, I struggle with the country’s governance, openness and, therefore, the reliability of its data. Behind the scenes of an economic miracle, China has remained a gigantic black box to insiders and outsiders.

Leave a Reply