Archive for ‘Inner Mongolia’

07/03/2019

China ‘exaggerated’ GDP data by 2 percentage points for at least nine years, new study says

  • Mainland has overestimated its nominal and real growth rates by about 2 full percentage points on average between 2008 to 2016
  • Calculations suggest that the current nominal size of the economy is about 18 per cent lower than the official level of US$13.4 trillion at the end of 2018

13 Feb 2019

The paper, “A Forensic Examination of China’s National Account”, was submitted to the “Brookings Papers on Economic Activity”, a journal published by the US-based Brookings Institute. Photo: EPA
The paper, “A Forensic Examination of China’s National Account”, was submitted to the “Brookings Papers on Economic Activity”, a journal published by the US-based Brookings Institute. Photo: EPA
China has overestimated its nominal and real growth rates by about 2 full percentage points on average between 2008 to 2016, with the miscalculation increasing each year, according to a new study published on Thursday.
The results indicate that the actual size of China’s economy at the end of 2018 was well below the government’s official estimate.
It also raises questions not only about the quality of economic data from the world’s second largest economy, but also the willingness of the government to take the steps necessary to accurately report information.
Using the study’s findings and applying them to government figures starting with the level of nominal gross domestic product (GDP) at the end of 2007 and the growth rate for 2008, calculations by the South China Morning Post show that the current nominal size of the Chinese economy is about 18 per cent lower than the official level of 90 trillion yuan (US$13.4 trillion) at the end of 2018.
The calculation assumes that the government’s official 2017 and 2018 nominal growth rates are overestimated by 2 percentage points, as suggested by the study.

Overestimates of growth in 2007 and previous years would further reduce the current size of the Chinese economy.

SCMP calculations show the adjusted nominal GDP level in China is about US$11.5 trillion using current exchange rates, still more than twice the size of Japan’s economy at US$5.16 trillion, but well below the economy of the United States at US$20 trillion.

The paper, “A Forensic Examination of China’s National Account”, was submitted to the “Brookings Papers on Economic Activity”, a journal published by the US-based think tank Brookings Institute twice a year on macroeconomic issues that are influencing the public policy debate. It will be formally presented in Washington on Thursday.
“Our estimates suggest that the extent by which local governments exaggerate local GDP accelerated after 2008, but the magnitude of the adjustment by the NBS did not change in tandem,” the authors said.

The study focuses primarily on nominal, non-inflation adjusted growth.

The paper comes at a sensitive time for Chinese policymakers, who are battling a slowing economy due to their campaign to reduce debt and risky lending as well as the effect of the trade war with the United States. The inflation-adjusted growth rate of 6.6 per cent last year was the slowest since 1990.

On Tuesday, the government announced that it had lowered its growth target for 2019 to a range of 6 to 6.5 per cent, down from “about 6.5 per cent” last year due to the multiple headwinds the economy is facing. The government also announced new tax cuts and additional government spending to help stabilise growth.
The paper’s four authors – Chen Wei, Chen Xilu and Michael Song from the Chinese University of Hong Kong and Chang-Tai Hsieh from the University of Chicago – used a mix of economic indicators that are less likely to have been manipulated by authorities to prove that the National Bureau of Statistics (NBS) have not done enough to correct the errors in the data collected from provincial governments over the past decade.

Our estimates suggest that the extent by which local governments exaggerate local GDP accelerated after 2008, but the magnitude of the adjustment by the NBS did not change in tandem.Report authors

It has long been believed that local Chinese officials inflate figures reflecting their economic performance, which is closely tied to their opportunity for promotion. Since 2003, the NBS has produced a national gross domestic product (GDP) figure that is lower than aggregate provincial data after examining other data such as the census and land sales.

Local statistics bureaus generally overstate industrial output as a portion of overall production as well as the size of investment within overall expenditures, the two different approaches to calculating GDP, according to the paper. The methods of data collection are often the cause, for example, calculations of investment spending have been based purely on government reports on specific projects rather than on the financial statements of the investing firms involved.

One method that the authors used to probe the accuracy of the NBS’s adjustments was comparing the growth of official GDP with the growth of revenue from value-added tax (VAT), which taxes the value added to a product at each stage of production.

Local governments have fewer incentives to manipulate VAT revenue, since a large portion of it is eventually transferred to the central government, therefore overstating VAT would only increase fiscal revenue losses.

Premier Li Keqiang confirmed China had lowered its growth target for 2019 to a range of 6 to 6.5 per cent at the National People’s Congress on Tuesday. Photo:
Premier Li Keqiang confirmed China had lowered its growth target for 2019 to a range of 6 to 6.5 per cent at the National People’s Congress on Tuesday. Photo:

Although the NBS adjusts downwards local statistics, it does not report the adjusted local statistics, perhaps out of a desire to not confront powerful local leaders.Report authors

“Although the NBS adjusts downwards local statistics, it does not report the adjusted local statistics, perhaps out of a desire to not confront powerful local leaders,” the authors said.

Since September, the NBS has named and shamed local governments on its website for manipulating data, but it remains to be seen if local governments fall in line.

In a post in January, the NBS said it had passed 14 cases of data falsification on to local governments before February 2018 but that it had not been updated even though local officials are required by law to punish those responsible for manipulating data within six months after receiving a notice of a violation.

The NBS’s ability to fix China’s GDP data problem is bound by its limited political power, the authors indicated.

“There are three problems with China’s GDP. One is that it doesn’t necessarily measure the right thing. Two is statistical bias in the way data is collected. Three is really a macro policy problem by the government which should write down all the bad debt,” said Michael Pettis, professor of finance at Peking University.

“The NBS is only trying to fix the second problem.”

Source: SCMP

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07/03/2019

In sensitive year for China, warnings against ‘erroneous thoughts’

BEIJING (Reuters) – China’s ruling Communist Party is ramping up calls for political loyalty in a year of sensitive anniversaries, warning against “erroneous thoughts” as officials fall over themselves to pledge allegiance to President Xi Jinping and his philosophy.

This year is marked by some delicate milestones: 30 years since the bloody crackdown on pro-democracy demonstrators in and around Tiananmen Square; 60 years since the Dalai Lama fled from Tibet into exile; and finally, on Oct. 1, 70 years since the founding of Communist China.

Born of turmoil and revolution, the Communist Party came to power in 1949 on the back of decades of civil war in which millions died, and has always been on high alert for “luan”, or “chaos”, and valued stability above all else.

“This year is the 70th anniversary of the founding of new China,” Xi told legislators from Inner Mongolia on Tuesday, the opening day of the annual meeting of parliament. “Maintaining sustained, healthy economic development and social stability is a mission that is extremely arduous.”

Xi has tightened the party’s grip on almost every facet of government and life since assuming power in late 2012.

ROOTING OUT DISLOYALTY

The party has increasingly been making rooting out disloyalty and wavering from the party line a disciplinary offence to be enforced by its anti-corruption watchdog, whose role had ostensibly been to go after criminal acts such as bribery and lesser bureaucratic transgressions.

The graft buster said last month it would “uncover political deviation” in its political inspections this year of provincial governments and ministries.

Top graft buster Zhao Leji, in a January speech to the corruption watchdog, a full transcript of which the party released late February, used the word “loyalty” eight times.

“Set an example with your loyalty to the party,” Zhao said.

China has persistently denied its war on corruption is about political manoeuvring or Xi taking down his enemies. Xi told an audience in Seattle in 2015 that the anti-graft fight was no “House of Cards”-style power play, in a reference to the Netflix U.S. political drama.

The deeper fear for the party is some sort of unrest or a domestic or even international event fomenting a crisis that could end its rule.

Xi told officials in January they need to be on high alert for “black swan” events..

That same month the top law-enforcement official said China’s police must focus on withstanding “colour revolutions”, or popular uprisings, and treat the defence of China’s political system as central to their work.

The party has meanwhile shown no interest in political reform, and has been doubling down on the merits of the Communist Party, including this month rolling out English-language propaganda videos on state media-run Twitter accounts to laud “Chinese democracy”. Twitter remains blocked in China.

The official state news agency Xinhua said in an English-language commentary on Sunday that China was determined to stick to its political model and rejected Western-style democracy.
“The country began to learn about democracy a century ago, but soon found Western politics did not work here. Decades of turmoil and civil war followed,” it said.
Source: Reuters
05/02/2019

People from various industries stick to their posts on eve of Spring Festival

#CHINA-SPRING FESTIVAL-EVE-WORK (CN)

Sanitation workers clean a street in Hohhot, capital of north China’s Inner Mongolia Autonomous Region, Feb. 4, 2019. People from various industries stick to their posts on the eve of the Spring Festival which falls on Feb. 5 this year. (Xinhua/Ding Genhou)

Source: Xinhua

04/02/2019

Desperate Mongolians send children into countryside to escape choking winter smog

ULAANBAATAR (Reuters) – Mongolia has extended school winter holidays in the world’s coldest capital and many families have sent children to live with relatives in the vast, windswept grasslands to escape choking smog and respiratory diseases such as pneumonia.

The temperature is expected to drop to minus 32 degrees Celsius (minus 26F) in Ulaanbaatar on Monday night, as residents burn coal and trash to try to keep warm and concentrations of smog particles known as PM2.5 routinely exceed 500 mg per cubic meter, 50 times the level considered safe by the WHO.

Mongolia, a former Soviet satellite landlocked between Russia and China, has invested public money and foreign aid to tackle pollution, but improvement has been slow, with residents saying inaction has been compounded by a corruption scandal that has paralyzed parliament.

In a crowded township more than 40 miles from Ulaanbaatar, Jantsandulam Bold’s five grandchildren are breathing more easily after fleeing the capital.

“Fresh air and sun are most important for kids to grow healthy and robust,” says Jantsandulam, 57, making milk tea for her grandchildren in her home, a thickly padded felt hut known as a “ger”, or in Russian, a “yurt”.

“This little one had flu when he came here but the fresh air has treated him well,” she said, pointing at her five-year-old grandson.

The children are nearing the end of a two-month break, with schools due to reopen next Monday.

About 60 percent of Mongolia is covered by grassland, where the mining of copper, gold, coal and other minerals provides employment, while the Gobi desert envelops the South. But almost half the population live in Ulaanbataar.

Reuters calculations based on U.S. Embassy data show annual average PM2.5 concentrations hit 100 micrograms in Ulaanbaatar in 2018. They soared to 270 in December. PM2.5 in China’s most polluted city of Shijiazhuang stood at an average 70 micrograms last year, down 15.7 percent from 2017. The World Health Organisation recommends a concentration of no more than 10 micrograms.

The WHO said 80 percent of Ulaanbaatar’s smog was caused by coal burning in “ger” districts, where thousands of rural migrants, used to a nomadic lifestyle, have pitched huts. It estimates air pollution causes more than 4,000 premature deaths a year.

A joint study by the U.N. International Children’s Emergency Fund (UNICEF) and Mongolia’s National Centre for Public Health said children living in one smog-prone district of Ulaanbaatar had 40 percent less lung function than those living in the countryside.

“Air pollution aggravates respiratory diseases and children under five are most vulnerable as their organs are still not mature,” said Bolormaa Bumbaa, a doctor at Bayangol District’s Children’s hospital in Ulaanbaatar.

Families have already set up a pressure group known as Moms and Dads Against Smog, but after the protests they organized in Ulaanbaatar were ignored, the group decided to focus on encouraging residents to take action to protect themselves, said Mandakhjargal Tumur, a group coordinator.

“I don’t believe the government will do enough to reduce pollution in coming years,” she said. “That’s why we are now focusing on raising awareness.”

At the Bayangol hospital, Ulzii-Orshikh Otgon, 34, was forced to bring her 10-month-old daughter Achmaa in with pneumonia for the second time in a month.

“I believe it’s because of the pollution,” she said, adding that home air purifiers did little to help.

“Just by opening the door, our home fills with smog,” she said while breastfeeding Achmaa in the waiting room.

Doctors advised her to take her children out of Ulaanbaatar but she has no relatives in the countryside and rent is expensive.

“Decision makers have said for years they are fighting pollution,” she said. “They just wasted billions of tugriks on useless stoves and processed coal, which don’t change anything.”

Source: Reuters

22/01/2019

Inner Mongolia to lift 140,000 people out of poverty

HOHHOT, Jan. 21 (Xinhua) — North China’s Inner Mongolia Autonomous Region will help 140,000 people and all its county-level regions escape poverty in 2019, local authorities said Monday.

Governments at all levels invested 10.1 billion yuan (1.5 billion U.S. dollars) of special poverty-relief fund in 2018, up 25 percent year on year, lifting 235,000 people out of poverty, it said.

About 332,000 government officials attended training sessions for poverty alleviation last year.

The regional government said the poverty headcount ratio had dropped to 1.06 percent by the end of last year.

In 2019, the government will strengthen the implementation of poverty relief policies, deepen cooperation with Beijing city on fighting poverty and boost its featured industries to create more jobs and income for local people.

Source: Xinhua

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