New Delhi: Is the booming Chinese economy just a bubble, which can burst any time? As per a report in the New York Times, top corporate honchos in China and Western economists suggest evidence that local and provincial officials are “inflating economic statistics” to hide the true depth of the troubles.
Huge amount of excess coal have accumulated at the country's biggest storage areas because power plants are burning less coal in the face of tumbling electricity demand, the report said.
The Chinese National Bureau of Statistics, the government agency in Beijing, which compiles most of the country's economic data, however, has refuted that economic figures had been overstated.
As per the power sector executives in China, local and provincial government officials have forced plant managers not to report to Beijing the full extent of the slowdown.
The corporate executives and economists have also said that officials in some cities and provinces in the country are also overstating economic output, corporate revenue, corporate profits and tax receipts. The officials do so by urging businesses to keep separate sets of books, showing improving business results and tax payments that do not exist, the report added.
The executives and economists roughly estimated that the effect of the inaccurate statistics was to falsely inflate a variety of economic indicators by 1 or 2 percentage. That may be enough to make very bad economic news look merely bad.
The executives and economists in China requested anonymity for fear of jeopardizing their relationship with the authorities, on whom they depend for data and business deals.
An economist having ties with National Bureau of Statistics said that officials had begun making inquiries after detecting signs that electricity numbers may have been overstated.
First Published: Saturday, June 23, 2012, 20:19