China Fake Economic Statistics - Everybody’s Doing ItEconomics / Economic Statistics Jan 19, 2016 - 05:55 PM GMT
Yesterday’s post on the unreliability of China’s official numbers attracted comments that were mostly along the lines of “people who live in glass houses shouldn’t throw stones.” That is, where does an American get off criticizing the honesty of another government’s reporting practices? Some samples:
Not to put too fine a point on it but do you trust US GDP numbers? Unemployment numbers? Inflation numbers? Which country, if they posted totally true and accepted numbers, would have the larger impact on global markets? The biggest economy or the second biggest economy? Just saying….
Along the same line, do you trust gold miners, silver miners, or oil companies? They never talk about earnings. The latest scam is they talk about AISC or AIGC, all in silver (or gold) cost. Please. Do I look that stupid. Tell me how much profit you made according to GAAP accounting standards. Is that too much to ask? Apparently, lol.
A whole lot a “massaging” of data in USA to report what they feel they need to create the perception they want the public to have. Psychology and mood are judged to be more important than true data. “lie to me, tell me it’ll be all right and I write more checks, borrow more money”
“China is big, yes, but it lacks the rule of law and stable institutions of a world power. ” It is problematic to talk about “the rule of law” being absent in China while writing from a country where, among other things, police seize property absent trial and finding of guilt, where citizens are sometimes assassinated by flying robots, likewise with no trial, where existing law is flouted, as in the case of the GM bailout, or where non- violent protesters can be penned, like animals within razor-wire enclosures (with no water or portapotties) dubbed “Free Speech Zones.” Where a recent President described the Constitution as a “G-D piece of paper.”
In 2013, our “servants” adjusted the gross investment number, adding research and development (R&D) spending which shouldn’t be included in the GDP because it’s not an investment worth real dollars. They also included art, music, film royalties, books and theatre. 30 years ago government rigged inflation numbers by changing the fixed items used to compute the inflation rate to lower the rate. A pound of beef has doubled in price, heck substitute chicken which costs $1.05 that way we can show a 5% increase rather than a 100% change. By offsetting inflation, GDP is made to appear higher than what it really is. Does anyone remember when you could buy a VW for under 2,000 or a cheap house for 20,000? What does a cheap car cost today, 15,000? What does a cheap house cost today, 150,000? Yet the government will tell you how much better your wages are. What a joke.
Oath breakers now use dormant, non-productive activities in the production numbers so people reading books are equivalent to new factories being built. Instead of simply including the Apple iPads for example, they will also include the R&D to make them. Instead of including pension payouts, they include “the promise to pay” in their new accounting scheme.
Okay, point taken. China’s numbers probably are misleading, but saying that without acknowledging US practices that are more sophisticated but arguably more serious gave the impression that China is somehow unique, which it is not. The case could actually be made that fabricating economic stats is a sign that China is joining the community of “advanced” countries.
By John Rubino
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