BEIJING – According to a March 7 Beijing Youth Daily report, at the Chinese People’s Political Consultative Conference, Chinese National Bureau of Statistics Commissioner Li Deshui began his speech by saying that many had asked him how could “numerous provinces and cities report double-digit gross domestic product levels last year when our national GDP was only nine percent?”

“Many provinces and cities overestimated GDP and reported false statistics,” said Li. “This is the main reason why many local GDP totals were larger than the national figure.” Li described the four major reasons for the GDP discrepancies: each level of many municipal governments over-reported to meet targets set at beginning of the year, there are no unified standards for the statistics, different data sources are used and products are often double-counted.

Li also said, “The root cause of the problem is that local governments are in competition with one another and have overemphasized the importance of GDP. Many local governments have used GDP as an index to measure officials’ performance, with some areas even dismissing officials for comparatively low GDP. Thus, local GDP is often reported higher than provincial GDP, and the total of all provincial statistics was higher than the national figure. The differences were very significant.”

Gu Yongjiang, the former chairman of China Resources Co., called for more severe punishment for officials reporting false statistics. Gu told a story about a provincial leader who went to inspect a locality’s economy. He did so without advance notice to observe the true state of affairs. The provincial leader stopped his car and asked people he met on the streets about the local economy and production system. The people told him that everything was great.

Later, the provincial leader learned that local officials had coached the people he had met on the streets to give those answers. Gu said he was saddened. “It is very alarming that local officials are creating false statistics and false news.”

Gu said that corrective measures have to be introduced to provide reliable statistics, and he expressed concern that false statistics could contribute to incorrect policy-making.