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Garbage in, garbage out

Great article by Joshua Kurlantzick in The New Republic arguing that the Chinese economic boom is a myth, and that the real conditions of the economy are very different than those reported in the media. The article focuses on the implications for American businesses and American foreign policy if the hype turns out to be false, but the part that caught my eye was the explanation:

How could Rawski's numbers differ so much from Beijing's? The primary explanation is that China's national economic statistics, which are compiled from provincial data, have no safeguards against political meddling. When the central government declares its growth targets early in a year-- in 1998, for example, Beijing announced that 8 percent annual growth was "a political responsibility"--provincial officials simply make up numbers to substantiate them. "China's statistics are based on a Soviet-type system where each town and province reports figures, rather than having a national organization do the reports, and many local officials I have met feel intense pressure to meet targets," says Joe Studwell, editor of the China Economic Quarterly. In 2001 alone, according to the government's own State Statistical Bureau, there were over 60,000 reported falsifications of provincial data.

Other prominent economists share Rawski's doubts about China's reported growth rates. Leading Chinese economist and writer He Qinglian told me that, in 2000 and 2001, she traveled around southern China, stopping into provincial officials' offices. When she asked them for their provincial GDP statistics and their methodologies, many were unable to provide either; when they did provide them, the numbers almost never added up.

In private, and when speaking to certain domestic reporters, even China's leaders admit the fix is in. When Rawski and other leading economists chat with official statisticians in Beijing, they often hear that no one in the government believes recent GDP numbers.

It's good news if that's true in Beijing, but many people outside the Chinese government swallow these sorts of numbers credulously.

This points out a larger problem: people tend to believe statistics, no matter how flimsily those statistics are supported, if the statistics coincide with their world view. I was watching Phil Donahue yesterday -- yes, one of the four or five people who did -- in yet another of his endless series of programs attempting to prove how supporting Saddam Hussein is the moral thing to do, and one of his guests trotted out the old sanctions-killing-billions-of-Iraqi-babies canard. Phil Donahue echoed his approval, pointing out that these were U.N. numbers, so they had to be believed. Now, Matt Welch has already thoroughly debunked this statistic, but that's not the point. The point is the total willingness of the speaker, the host, and the audience to believe these numbers, just because some organization published them, with no investigation of how the numbers were calculated. In my own experience, I can't count the number of defenders of Fidel Castro I've run into who cite his great successes with literacy, infant mortality, and universal health care as "proof" of the superiority of socialism to the American system. I always wonder exactly how these people become so convinced of these numbers. Saddam Hussein claims a 100% re-election rate, and nobody takes him seriously. But Fidel Castro claims a 99% literacy rate, and people proclaim him a genius. So now people are doing the same with China.


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