Investors and market watchers should view economic statistics announced by Beijing with caution, as the overly rosy figures are the result of Chinese manipulation, a Chinese economics scholar warned yesterday.
"The high growth rate of 8 percent forecast for the year is a myth and is unreliable," said Cheng Xiaonong (程曉農), vice president of the Center for Modern China in the US, in a speech organized by the Chung-Hua Institute of Economic Research (CIER, 中經院).
Cheng, a prodigy of former Chinese president Zhao Ziyang (
The statistics-gathering process is distorted through bureaucratic manipulation and the final GDP figures released to the media are entirely for propaganda purposes, he said.
According to Cheng, GDP should not serve as the only index with which to gauge the Chinese economic situation, as there are other factors including the jobless rate, the consumer price index (CPI) and enterprise utilization rate to be taken into account.
He said that most of the critical indices -- including the unemployment rate -- were not released by the authorities. And though the official Chinese data showed that the jobless rate stands at around 3.4 percent, his research in 2002 indicated it was already as high as 20 percent.
"By taking all indices into account, China's 8 percent growth is equivalent to 1 percent to 2 percent of its US counterpart ? All this does not hide the fact that the Chinese economy is starting on a downward trend," he said.
As the CPI across the Taiwan Strait remains at a historical low, domestic demand is being drag-ged down at the same time. Therefore, it is contradictory to say that the Chinese economy is growing at such a fast pace when there is such low domestic demand, he said.
To counter this, Beijing has resorted to alternatives, including looking for overseas investment and boosting real-estate development. But these drivers will not last forever, he said.
However, another academic said that even though the 8 percent growth figure might be controversial, in reality it might be just 1 percent to 2 percent lower.
"We can't deny the fact the Chinese economy is indeed growing at a rapid pace," said Chuang Yih-chyi (莊奕琦), an economics professor at National Chengchi University.
The debate should not be centered around the exact growth figure, but rather on how China applies its burgeoning economic scale to every aspect of the nation, such as resource sharing, infrastructure building and other mat-ters such as law and regulation improvement.
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