Generally, when we talk about China, no matter if you have been there or haven’t had the chance yet, what are the images and words that pop up in your head about China?
Made in China? AliExpress? It is a big country? There are a lot of Chinese people? Chinese food? Panda? Pollution? Economic growth? Maybe all of them? Or something else.
From an economic point of view, many people are putting a lot of attention on the relationship between China and the US. Who is going to be the next superpower? Who will be the next leader?
A lot of us are very much focused on the numbers and figures when talking about the economy and the next world leader. But is published data about China misleading, or China’s data is misleading? Anyone ever thought about that?
First of all, what is data? Are we only talking about numbers here?
Data is more than just numbers, according to the dictionary, data is “individual facts, statistics, or items of information”. (Data, 2017)
Langs de oevers van de Yangtze
When VPRO introduced the documentary “Langs de oevers van de Yangtze” in 2016, it was a huge success in the Netherlands, over 1 million people watched it on TV on the day it was released (Tomas, 2016). The documentary aims to reflect the contrasts in China: the rich and the poor; the modern and the tradition; the cities and the rural; the advantages and disadvantages of China’s economic reforms.
As a native Chinese viewer, I was disappointed by this documentary, I had the feeling the point of view was very subjective. They tried to emphasize the bad aspects rather than the good ones. However, they choose to interview and document certain events in this film and is it possible to make a generalization based on this documentation? Why do they think the clips reflect the real situation in China?
In my opinion, Ruben (the director of the documentary) sometimes used manipulative words and loaded questions in Chinese to his interviewees which made the data he collected biased.
“Do not frame a question to fit a headline that you hope to write.” (Silver, 2012)
I also thought this documentary can be misleading sometimes, it sends certain signals to the audience, especially for the ones who have never been to China, they would believe what was being broadcasted.
But, what if I was being very subjective as well? That I only want people to know the good things instead of the bad things? We always take an angle to share our part of a story, that is in fact very misleading.
“Our brains, wired to detect patterns, are always looking for a signal, when instead we should appreciate how noisy the data is.” (Mayer, 2002)
Now, let’s take my hometown Shanghai as an example, which was in the first episode of Langs de oevers van de Yangtze. I was born in 1990, on the other side of the Huangpu River, you were barely able to see any skyscrapers; by the time I went to the Netherlands to study (2010), there were skyscrapers, lights, lively nightlife on the other side of the river.
And this is how Shanghai looks in 2017: (can you spot the difference? Let me know in the comment!)
China GDP growth slowdown
One thing is for sure the economy is growing rapidly in China. However, does China still grow as much as when it started its economic reforms in 1978? Did China’s GDP slow down?
When you type “China GDP growth slowdown” in Google the following top 8 search results pop up, mostly reported by renowned news channels such as the Guardian, Bloomberg, the BBC and so on. As you can see, there are 2 highlighted titles stating “China’s economic growth slowest in 25 years”, but one was talking about 2015, the other one was about 2016? So how do we calculate the 25 years exactly? Which number should we believe? Aren’t they a bit misleading?
As a matter of fact, China has a history of smoothing data in its growth figures (S.R., 2015), the current premier Li Keqiang, once said, that local GDP data were “man-made and therefore unreliable”.
During the time of the Asian financial crisis in 1998, China’s actual GDP growth was close to 5% while it was claimed to be 7-8%. In early 2000, when China’s growth was in fact close to 10%, it was reported to be 8-9% (S.R., 2015).
Why always around 8%? Is that because 8 is the lucky number for most of the Chinese people?
Now, let’s take a look at the graph below, especially at the year 2000, while The Economist thought the GDP growth that year was close to 10%, The Wall Street Journal indicated around 9%, and the Chinese government said about 8-9%. Confused? Yeah, me too. One might say, the differences between these 3 numbers are not that big, so why bother? Well, because we shouldn’t be misled by different data. 1% more or less on GDP growth reflects much more than just the number, 1.
Also, why would China understate the actual growth? Why mislead the public when China was actually doing better than the publicly shared numbers? One possibility proposed by The Economist is that the Chinese government wanted to downplay its strength to avoid arousing anger at the time (S.R., 2015).
“Quantitative subjective assessments are almost always biased, sometimes completely misleading.” (Poulton, 1977)
What are the reasons for this misleading data? Is it because the Chinese government and the various news outlets have to form an opinion? Or is there no actual truth to this matter?
On the other hand, Bai, Mao and Zhang (2014) have confirmed that a systematic bias of concentration estimation with censored survey data in China. It is particularly important for rapidly industrializing and developing economies such as China, to accurately reveal the real trend when only sampling survey data are available (Bai, Mao & Zhang, 2014). Furthermore, Yang, Li and van Heck (2015) indicated that improved information transparency can lead to higher levels of traders’ dynamic interactions, and the information is the key in a prediction market. “Traders’ dynamic interactions refer to a trader’s revision of buy or sell orders on contracts.” (Yang, Li & van Heck, 2015)
Taking China’s GDP as an example, is it ok for countries to mislead other nations in order to get ahead or hide vulnerability in the global economy?
- Bai, C. E., Mao, J., Zhang, Q. (2014). Measuring market concentration in China: the problem with using censored data and its rectification. China Economic Review, 30, 432-447. Doi: https://doi.org/10.1016/j.chieco.2014.05.013
- Data. (2017). Retrieved from: http://www.dictionary.com/browse/data
- Meyer, Ph. (2002). Surveys. In Precision Journalism. A reporter’s introduction to social science methods (pp. 99-130). Lanham, Maryland: Rowman & Littlefield.
- Poulton, E.C. (1977). Quantitative subjective assessments are almost always biased, sometimes completely misleading. British journal of Psychology, 68(4), 409-425. Doi: 10.1111/j.2044-8295.1977.tb01607.x
- Yang, S.Y., Li, T., van Heck, E. (2015). Information transparency in prediction markets. Decision Support Systems, 78, 67-79. Doi: https://doi.org/10.1016/j.dss.2015.05.009
- Silver, N. (2012). The Signal and the Noise: why so many predictions fail- but some don’t. New York, NY: the Penguin press.
- S.R. (2015). Whether to believe China’s GDP figures. Retrieved from: https://www.economist.com/blogs/freeexchange/2015/07/chinese-economy
- Tomas, I. (2016). De TV van gisteren: 1 miljoen voor Langs de Oevers van de Yangtze. Retrieved from: https://www.televizier.nl/categorie/kijkcijfers/de-tv-van-gisteren-1-miljoen-voor-langs-de-oevers.31077.lynkx