If You Believe the Official Reason for Cutting Off Chinese Economic Statistics, I Have a Great Wall to Sell You
Since October of last year, China’s National Bureau of Statistics has not published detailed data on metals markets. And it’s not just metals:
Data on oil products such as liquefied petroleum gas, naphtha and fuel oil have been withdrawn. So too have regional figures for coal, steel and electricity output.
The ostensible reason is that statistics bureau personnel were selling data for personal gain.
If you believe that, I will sell you a large wall. It’s so big they say you can see it from space! Only one like it! I sell it to you for a song.
“Anti-corruption” is the cover/pretext that the Chinese government now uses to eliminate those who have fallen from political favor. The most likely explanation for the “anti-corruption” drive aimed at economic statistics agencies is not to eliminate politically inconvenient people: it is to eliminate politically inconvenient data.
The fraudulence of Chinese official economic statistics is well known. One of the challenges of creating false official statistics for aggregate numbers like GDP growth is making it consistent with data on specific industries or sectors. The divergence between GDP growth and electricity production, for instance, has often been remarked upon.
How to solve this problem? Stop producing the underlying sector/industry/product specific data. How to do that without giving away the real reason? Use the all-purpose excuse: fighting corruption.
This has an air of plausibility: after all, corruption is rife in China. But this really doesn’t pass the smell test, especially given the timing: note that the data embargo started when concerns about the Chinese economy became acute at the end of last year.
The Chinese are desperate to maintain the illusion of 6.7 percent growth, quarter in, quarter out. Maintaining that illusion has become harder and harder as questioning of the consistency of various data sources has become more insistent. Shutting off the flow of sector/industry/product data is a brute force way of dealing with that problem.
This is another signal of the real state of the Chinese economy. The government wouldn’t have jacked up the stimulus unless the true state of affairs was far more dire than official statistics suggest. The government wouldn’t be suppressing data from the primary goods sectors unless it was also giving the lie to the official line.
Bottom line: question everything relating to the economy in China right now. Be especially skeptical about anything done under the banner of fighting corruption. That banner should be a red flag warning that the Chinese Communist Party is trying to suppress inconvenient people, or inconvenient truths. If they say it’s about corruption, it’s really about something else.