The Chinese economy may be almost one-seventh smaller than officially reported, says The Economist. A new paper published by Washington’s Brookings Institution found that industrial output and investment have been “consistently embellished”.
The study used data on the collection of value-added tax, which has been compiled for almost 15 years and is hard to tamper with, to establish a more accurate reflection of overall output. A key problem in recent years has been provincial officials, whose promotions depend on economic performance, fiddling with statistics. “Since they rank above the national statistics bureau politically, only the bravest bean counter would dare stand in their way.”
“We have had the Union of Soviet Socialist Republics, which was such an economic disaster that millions died of starvation. Oh, and there was mass slave labour, torture and executions of political opponents, too. Then came the People’s Republic of China: pretty much the same thing… There were over 20 attempts at socialism in the 20th century, and every single one ended in economic failure and political terror… So why don’t people… realise that socialism is a rotten way to run a country? One cynical theory posits that our academics and teachers were often clever children who did well at school. They have belatedly found that some thicko at the back of the class has gone into the doughnut business or women’s underwear business and
made buckets of money. This persuades them that the world is deeply unjust and that expropriation of the rich is the only fair answer.”
James Bartholomew, The Daily Telegraph