Having a real picture of the country’s economy is necessary to ensure growth and social stability. Around 278 officials were sanctioned while 787 companies were sanctioned. Local leaders manipulate data in search of promotions. The “hidden” debt of the provinces ranges between $ 5.8 trillion and $ 8.3 trillion. Li Keqiang is a critic of the situation.
Beijing (AsiaNews) – The Chinese central government has decided to tackle the often false and distorted economic data of the provinces.
While the pandemic emergency still threatens growth and social stability, national authorities need an accurate picture of the local situation to formulate effective policies.
Official figures are almost always positive but often do not reflect the real situation in which small businesses and ordinary citizens find themselves.
Many observers, especially foreigners, questioned the reliability of China’s economic data. GDP, debt, employment and private income are the parameters most targeted by critics.
According to South China Morning Post, China’s National Bureau of Statistics has conducted two rounds of inspections in 12 provinces since September. As a result, 278 officials were sanctioned and 787 companies sanctioned for violating statistical regulations.
The main problem with data collection is that good economic statistics are usually the springboard for promotions. This is why local leaders tend to manipulate the numbers for the benefit of their careers.
A frequently cited case is that of provincial GDPs, which when combined tend to exceed the national total.
For the Chinese authorities, local corruption and high levels of local government debt remain the main challenge to ensure political and social stability, especially as the Chinese Communist Party is preparing to renew Xi Jinping’s term in office. head in 2022.
In 2020, China’s official public debt stood at 46 trillion yuan ($ 7 trillion), or about 45 percent of GDP.
But to this is added the “hidden” debt of local administrations, estimated between 40 and 53 trillion yuan (5.8 and 8.3 billion dollars).
One year ago Premier Li Keqiang ordered local leaders to “tell the truth” about the economic situation of the regions they administer, the only way to achieve the government’s goals of boosting job creation, private spending and increased investment.
Li questioned the accuracy of the figures provided by local authorities since he was party secretary in Liaoning (2004-2007).
To assess the economic performance of the provinces, it has always preferred to use “indirect” indicators such as electricity consumption, the volume of rail freight transport and the amount of bank loans, which The Economist nicknamed “the Li Keqiang index”.
Last year, Li rocked the markets by admitting that 600 million people lived in China on a monthly income of 1,000 yuan, a figure that contradicts the government’s rhetoric of the country’s 400 million middle-income consumers.