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China, its statistics under fire, seeks IMF shelter

China has joined an IMF data system in a bid to improve statistical accuracy and transparency and counter critics who say the numbers supporting Asia's fastest growing economy are exaggerated, state media said on Saturday.

Central Bank Governor Dai Xianglong signed an agreement in Washington on Friday at a ceremony with International Monetary Fund Managing Director Horst Koehler, the official Financial News reported.

"China's entry to the IMF's General Data Dissemination System marks a new step forward in our statistical work," Dai was quoted by the newspaper as saying.

"China will continue to strengthen its cooperation with the International Monetary Fund, to help move Chinese statistics gathering up another level," he said, quoting a Chinese poem saying if you want to see far away, you must move up one storey in the pagoda.

Analysts say joining the system will force China to disclose how it gathers its statistics and uses them, and lay out clear plans to improve the process.

China, just months into its membership of the World Trade Organisation, has been stung by critics who have taken aim at its economic data, which rarely comes in below government targets.

The world's most populous country is off to another roaring start to the economic calendar, clocking gross domestic product growth of 7.6 per cent in the first quarter and rebounding back from its worst quarterly performance in two years.

Inflating?

But critics at home and abroad argue China regularly inflates politically sensitive growth numbers to enhance its international image and garner local support for the Communist Party.

They cite the discrepancy between the rapidly growing economy and lagging energy consumption as one example of faulty data.

In another, when China's economy grew 7.8 per cent in 1998, barely under an eight per cent annual target, only one province grew at a slower rate than the national average, Lehman Brothers noted in a research report.

Still, other analysts say the patchy improvements in data collection after two decades of sweeping economic reform have meant China's growth might even have been under-reported.

Either way, the reports touched a sensitive nerve with Chinese officials. National Statistics Bureau Vice Director Qiu Xiaohua found himself on the back foot at a news conference to announce the country's latest economic figures on Wednesday.

After announcing the better-than-expected first quarter economic growth, Qiu then defended the bureau's figures, saying their credibility had greatly improved over the past 20 years of reform, and accused critics of arriving at misguided conclusions.

Qiu noted historical data from the United States, South Korea, Japan and Germany showed a similar phenomenon in terms of energy consumption lagging economic growth.

Still, he said there were problems -- the data made public was not complete and not always released in a timely manner.

And asked about the data earlier this month, Premier Zhu Rongji said China had wrung much excess "water" out of its statistical reporting over the past 50 years, but not all of it.

Getting serious

Officials held up China's joining of the IMF's General Data Dissemination System as an indication Beijing was serious about improving its numbers.

"It will help the Chinese government and the international community clearly understand China's macro-economy, provide a dependable base on which to make economic decisions and help the international community to make accurate judgements on China's economy," Dai said.

China now has its own Web page on the IMF site for GDDS at http://dsbb.imf.org/gddsindex.htm -- including a section announcing plans for improvement along all the links of the government data reporting chain -- from the central bank and foreign exchange regulator to customs and education and health ministries.

The central People's Bank of China had among other goals set a short-term target of publishing an annual calendar outlining when it would announce monetary and financial statistics, the site says. Those figures now come out on a haphazard schedule.

And the National Statistics Bureau pledges a raft of improvements in the near and medium term.

They include setting a calendar for advance release of national data, better implementing the Statistics Law to avoid misreporting of data and tougher scrutiny of provincial and state enterprise reporting.

"Follow up audit checks on enterprise data and similar checks on the data provided by provincial statistical offices will be strengthened," it said.

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