Newsweek
February 8, 2006

Melinda Liu writes that “numbers in China are often more of a political than a scientific tool” – an observation that will resonate with anyone who has tried to nail down an accurate Three Gorges resettlement figure.

The People’s Republic of China is awash in gaudy numbers. For much of its exceedingly long history (5,000 years), the country has held out the promise of the world’s biggest market (now more than 1.2 billion consumers). Beijing posted the highest growth rate of any major economy last year – an estimated 7.3 percent, when much of the world was stumbling closer to zero. China is at once the recipient of the most foreign investment of any country in Asia (nearly $47 billion last year), the sponsor of the world’s biggest hydroelectric project (the $27 billion Three Gorges Dam) and the site of the world’s highest railway, to Tibet (5,000 meters). The parade of gloating statistics would seem to portray a country that is larger than life – or at least larger and more illustrious than nations that must rely upon less quantifiable measures of worth, like, say, France. Yet those figures are themselves hardly scientific. Historians trace China’s current economic boom back to Deng Xiaoping’s famous “southern journey” to the city of Shenzhen in July 1992. Perched atop a golf cart, the 87-year-old paramount leader exhorted local authorities to redouble their efforts to attract foreign capital and open up the economy. The comments led to nearly a decade of double-digit growth. Or did they? Many of the white-hot numbers emerging from the People’s Republic in the 1980s and 1990s are now thought to have been cooked up by eager-to-please cadres. The pressure on Chinese officials intensified after the 1997 Asian financial crisis, when Beijing decided that the country had to grow by at least 7 percent a year in order to create enough jobs to forestall social unrest. Not surprisingly, reported growth rates have not dipped below that level since then. After Deng’s trip, the numbers reported by provincial authorities became “an important criterion in evaluating local government officials’ performance,” says Wang Xiaolu of China’s National Economic Research Institute. “This [has] created the incentive for statistical falsification.” Economists and professional China-watchers have long taken Chinese numbers with a grain of salt, and no one seems to have been terribly hurt by the puffed-up stats. But the massive labor protests that roiled the rust-belt cities of Daqing and Liaoyang recently provide stark warning of the dangers of relying on smoke and mirrors.