The problem of false reporting of statistics is now so serious in China that the National Bureau of Statistics has established a new department to deal with it.   

Just today, China’s Environment minister blamed worsening air quality on falsified statistics, claiming that local authorities repeatedly lie about pollution emissions and falsify environmental data to secure approval for construction projectss.  "It is clear the conflict between economic growth and environmental protection is coming to a head,"  he was quoted as saying.

The NBS themselves drew attention to the figures for national GDP growth rate for the past year, and the discrepancy between the NBS’s own calculations and the numbers supplied by local governments.  The NBS puts the national GDP growth rate at 10.9%, yet the local authorities of 23 of China’s 31 provinces estimate their growth rates at 12% or more.  Inner Mongolia, for example, claims GDP grew at 18.2%, while Jiangsu puts its growth at 15.4% (link). 

The reason for this discrepancy between NBS’s overall growth rate and that of the individual provinces is that the NBS assumes that the local governments are cooking the books and adjusts its figures accordingly. 

Last year, China was forced to revise its GDP growth rate for 2004 by more than 10%, from 6 percent to 16 percent, after an audit revealed that the statistics gathered around the country were wildly inaccurate.  From property vacancy rates to the numbers of people killed in natural disasters, the only reliable thing about official statistics in China is their inaccuracy. 

The new moves by the NBS to combat the problem are laudable, but will likely be completely ineffective.  They will have no effect because they do nothing to combat the root of the problem, which is that the civil service system as it current stands actively promotes fraud and corruption.  

Cadres don’t rise through the official ranks on merit or abilty (though doubtless there are those who absolutely deserve on merit to be where they are).  Rather, promotions are apportioned according to a complicated points system.  Officials are given a  set of  often very  detailed targets  that they must meet, e.g. they must attract a certain amount of inward investment or ensure a specified GDP growth rate.  If they hit the target, they are awarded points. If they  amass enough points they can move up to the next level, with a higher salary and more responsibility.  So there is an inbuilt motivation for lowly officials to falsify stats and submit exaggerated reports.  At the same time, the officials further up the line who should be checking these stats, are just as interested in gaining promotions, so they are just as motivated to ignore or even encourage false reporting from their subordinates.  Doing so makes them look good and earns them more points, perpetuating the failure of the system.