Bloomberg News reported on February 18, 2014 that the 31 Chinese provincial governments have released their respective Gross Domestic Product (GDP) numbers, where on a combined economic output measure; it expanded 9.2 percent for the whole of 2013 to 62.9 trillion yuan (USD 10.4 trillion). This measure was reported along with other data measures published by the local governments since December 2013, and compiled by Bloomberg News. The latest measure exceeded the national figure by 6.06 trillion yuan (slightly close to the original figure of 56.0 trillion yuan), or 10.7 percent, after an 11.0 percent margin in 2012.
As quoted jokingly by two Bloomberg Television News journalists speaking during the early Asian trading hours of the show, ‘First Up’ on Feb 18, one has to take the data that is coming from China ‘with a pinch of salt…’. What it means are that the figures on a national level, and on a provincial level, in theory, should add up, but in any case, the latest published figures on both levels are increasingly narrowing. However, on a serious note, it shows how the Chinese authorities have gone to the extent of maintaining a good public relations (PR) image globally through the use of data, and numbers. It is also quite worrying, especially when global investors are increasingly monitoring the pace of economic growth, and the changing dynamics in China, but have to manage quite a lot of challenges in trying to understand the economic data coming out from a country that do not seemed to have conformed to international economic measurement standards. The discrepancy gap in the published output numbers among the 31 provinces and the entire government (6.06 trillion yuan) was said to be equivalent to the size of the Indonesian economy.
The narrowing of the economic data figures are increasingly pointing towards the eventual realisation by the new Chinese government, under President Xi Jinping, and Premier Li Keqiang on the issue of openness, and transparency. The new crop of Chinese government officials are determined to put an end to data discrepancies, and focus on sustainable development, including debt reduction, issuing tough regulation controls that seek to persecute corrupt government officials, traders, among others. There will be less emphasis on growth at no expense, and instead the Chinese government will hope to focus on other major areas of measures are environment protection, and success factors coming from social welfare aspect as barometers for the measurement of performance of the local government officials
The latest set of provincial data does point to the various provinces that saw a mixed level of economic performances being generated including a 4.0 percent output level recorded in Shangxi province as compared to the national figure of 7.0 percent for Inner Mongolia. During 2013, China’s GDP was roughly in line with the 2012 figure of 7.7 percent, but for 2014, Bloomberg News has gathered some of the opinions from economists who forecasted economic growth for 2014 to be 7.3 percent to 7.4 percent. The next official government GDP 2014 forecast announcement is currently being set during the month of March 2014 where the Chinese Communist Party (CCP) will be holding its annual Spring meetings where government officials will try to outline their policy goals, achievements made so far, and discussed what improvements can be made in 2014 and beyond.
The question most investors will want to ask is whether the Chinese government has increasingly take into consideration many have been expressing earlier over the quality and integrity of the economic figures that are regularly being published. Investors are no fools when it comes to data monitoring, and record keeping. The narrowing of both the national and provincial economic output numbers is one of the first good steps taken to resolve future data discrepancies. Admittedly, the Chinese government cannot afford to create social instability and widespread chaos when it comes to published national data such as economic output, and this is something many investors have come to terms with it, but there has to be a limit as to how far the data discrepancies can go. It is because such published economic figures coming out from the second largest global economy move financial markets, and expectations, and the Chinese government can ill afford to manipulate the figures in order to gain investor confidence. The published data is meaningless, if it cannot be relied on at the first instance.