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Mao’s ‘Two Accounting Books Theory” - Founder of Beijing’s False Statistics
He Qinglian, Hua Xia Electronic Journal
3/30/2009

Recently China’s official media rebutted an article written by Alan Wheatley on Reuters titled, “Chinese data generate more heat than light – again.” In the article, it said, “Chinese statistics are a riddle wrapped in a mystery inside an enigma.” Especially “growth figures for the fourth quarter of 2008 were as clear as mud to most analysts” because “the headline GDP figure reveals very little resemblance to the underlying nominal growth trends.” The article’s advice is “to take Chinese statistics with a pinch, if not a packet, of salt” because “the figures are prone to manipulation by a government ...”

Targeting the Reuters article published on January 22, Beijing started its rebuttal on February 6. First Ma Jiantang, head of China’s National Bureau of Statistics, said, “To modify the domestic GDP is an international customary practice. It is baseless to doubt China’s statistical data. China’s official statistics are truthful and believable.”

On February 18, the People’s Daily interviewed Professors Liu Wei and Cai Zhizhou from Beijing University and published the article, “Are Chinese statistics truly a riddle wrapped in a mystery inside an enigma?” In the article, the authors accused the experts mentioned in the Reuters article as irresponsible for making the comment that China’s figures are a “manipulation by a government.” The Chinese article claimed that those experts did not understand China’s statistical indicators, methods, system nor basic economic activities, and their misjudgments will mislead those who care about China’s economy.

In fact, the international economics community has never stopped doubting China’s statistics. In 2002, there was a debate that lasted several months and involved a large crowd. No matter how Beijing defends itself, such doubts surrounding its official statistics reflect the government’s low credibility.

China’s abuse of statistics was caught twice recently. On February 2, Beijing published a number saying there were 20 million migrant workers who lost their jobs and returned home. Whoever published this number forgot to check with Premier Wen Jiabao. In Wen’s interview with the Financial Times on February 1, he said there were “12 million jobless migrant workers who have returned to the rural areas.” There was a gap of eight million. Another incident happened when China claimed the number of peasants living in poverty has decreased from 250 million to 20 million in the past 30 years. However, at a meeting with the UN Human Rights Council on February 9, Li Baodong, head of the Chinese delegation, said in the past 30 years, the number of persons in rural areas living in poverty has fallen from 250 million to over 14 million—a difference of six million.

It is a challenge for any researcher on how to use China’s statistics, this includes Chinese officials and scholars. On December 29, 2008, in the article “True statistics are needed in the face of crisis” published by the Liaowang Weekly, Beijing’s official news magazine, it solemnly reminded everyone that “the statistics this year should be solid and can stand up to repeated examination.”

Origin of Faking Statistics

The Chinese Communist Party (CCP) was born with the illness of faking statistics. It’s part of the CCP—from the central government’s attempt to stabilize the public to officials’ need for political achievements. The creator of this bad precedent was Mao Zedong. In January 1958, Mao presided over the release of “The work guidance for the ‘Great Leap Forward.’” The ninth article in the guidance stated: Make three books for the production project. Two of the books are for the central government. The first one is what can be achieved and it will be published the second one is what is expected to be achieved, which won’t be published. The local governments will run two books as well. The first one is the same as the second book of the central government, which are things the local government must achieve. The second one is what is expected to be achieved by the local government. We use the central government’s second book as the standard for evaluation.” From then on, the Chinese government used the two-books system, one of them is for distracting outsiders.

China’s National Bureau of Statistics inherited this glorious tradition and uses two data systems. The internal version is not for the people, but for the party staff inside the government. The internal version also runs different editions depending on the rank of the officials. Hence, regarding statistics, Beijing has several mouths, and political neccesity determines which mouth speaks.

If China wants to remove the reputation of a “Hell for Statisticians,” it needs to eliminate its undesirable political culture instead of accusing others of ‘malicious speculation.’

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