Red Cloud Still Obscures China's Appraisal Of The Global Economic Crisis
The Age
Monday December 1, 2008
During Chairman Mao's great leap, the fudging of production figures reached fanciful levels. Beijing's statisticians are still trying to untangle that mess.
BEIJING came under fire a decade ago for allegedly understating the extent of its economic downturn in the Asian financial crisis. Similar allegations are now surfacing about the impact of the global financial crisis.Are China's statistics deliberately manipulated or otherwise unreliable? With the economy teetering on the edge, the questions are not merely academic.Before delving into that debate it's worth remembering how much of a mess China's National Bureau of Statistics has had to untangle.Fifty years ago, Chairman Mao told all the boffins in China they had to be first "red" and "expert" second. Those who got it the wrong way around and subordinated their revolutionary enthusiasm to their professional expertise, were in fact "white" reactionaries."The line that one should be first expert and then red is in effect first white and then red, which is wrong," Mao told the party congress in 1957.The party had already committed to doubling grain production in a decade. Now Mao was saying steel production would soon surpass that of England. The program of fanciful production methods and targets came together as the Great Leap Forward. By mid-1958, the country was in an agrarian and industrial frenzy. Party leaders were talking about doubling the harvest and quadrupling steel production in a single year.We know from his subsequent writings that the then director of the National Bureau of Statistics, Xue Muqiao, was more than a little concerned about what was about to happen to his country. He resisted in small ways and tried to insulate real statistics from propaganda in some core areas.But ultimately he had to swim with the red tide to keep his job and maybe his life.Xue told his small team of pointy heads that they were now an "important special attack squad in the high tide of Chinese socialist construction". He marshalled his statistical troops for a "three-month bitter struggle" to assist with the coming summer grain harvest.Xue's message, published in June 1958 in the bureau's academic journal, made clear that numbers would be subordinated to a more glorious ideal."Of course, statistical report tables should aim at being punctual, reliable and comprehensive. But what if these statistical report tables contribute little towards the great leap in industrial and agricultural production that is taking place before our very eyes? That would be just statistics for the sake of statistics, and would not count as a great leap forward."Most importantly, Xue told his statisticians that they should take whatever grain production figures they got from local party leaders rather than what they saw with their own eyes."In the past, many comrades went about their statistical work with a mystical faith, and believed that statistical work must be commissioned out to specialist organisations and must not rely on the localities and certainly never rely on the masses," he said."This type of lack of faith in the localities and lack of faith in the masses is obviously a reflection of bourgeois thinking in statistical work."And what were local party officials reporting? In 1979, a year of reality-based statistics, peasants were said to be producing a little more than four tonnes of rice per hectare.But back in June 1958, the People's Daily began publishing inspiring stories about pilot rice fields that produced 15 tonnes per hectare. The standard of what qualified as page one "news" kept rising over the northern summer.By August, the People's Daily was lauding a harvest of 115tonnes per hectare from a plot in Hubei. By September, it was 453 tonnes from Guangdong, an improvement of more than 10,000 per cent over the previous year.Thankfully, even in those days there were some editorial checks and balances, as Melbourne University historian Anthony Garnaut explained in a recent paper:"This last yield is a fraction over the maximum scientifically possible yield, as calculated by the nuclear physicist Qian Xuesen, based on the amount of solar energy that lands on one square metre of earth in a year. While higher 'satellite' yields were reported by the localities, the conservative editors of the People's Daily decided that yields in excess of Qian Xuesen's thumbnail figure might not hold up to rigorous scientific scrutiny."The central government's grain procurement program was tied to local grain production figures. Provinces that were barely self-sufficient were forced to become large net exporters, both to other parts of China and internationally. The combination of statistical science fiction and a ruthless grain procurement system explains why 30million peasants starved during Mao's Great Leap Forward.China's core economic figures are no longer dishonest and there is little convincing evidence that they are systematically biased. But it is not surprising that the "expert and red" professionals who now run the National Bureau of Statistics are still untangling the mess their "red and expert" predecessors left behind.Their figures are still opaque, narrow and tardy. And these deficiencies go a long way towards explaining why the Government has been so late in recognising the economic morass it now admits the country is in.
© 2008 The Age