The enigma of China's GDP statistics

BEIJING - One plus one equals two. But it's not always the case, especially when you are talking about the calculating of local and national gross domestic product (GDP) data in China.

After the National Bureau of Statistics (NBS) on Monday unveiled economic data for 2013, what grabbed the most attention was not only the 7.7-percent annual growth figure, but also a somewhat peculiar math problem.

China's GDP amounted to 56.9 trillion yuan ($9.3 trillion) in 2013. However, the aggregate of the provincial GDP figures, which were independently calculated and released, was about 2 trillion yuan more than the 56.9-trillion-yuan figure arrived at by the NBS, even though three of the 31 localities that were yet to release the figures were not included.

This has aroused suspicion among Chinese netizens that some growth-obsessed local officials have cooked the books. Actually, the combined economic output of China's provinces has long exceeded that of the national level compiled by the NBS.

For 2011, the aggregate GDP figure of all localities was 4.6 trillion yuan more than the NBS tally of 47.1 trillion yuan. In 2012, the aggregate figure was 5.76 trillion yuan higher than the total of 51.93 trillion.

Overlapped calculation

Officials and experts attributed the divergence mainly to overlapped calculation among different regions.

"This is an old problem which recurs every time the data is released. The gap is mainly caused by duplicating calculation," Zhang Liqun, researcher at the Development Research Center of the State Council, told Xinhua.

Overlapping calculation often occurs when a big company has many subsidiaries, Zhang explained. In this case, the added value of the subsidiaries tend to be double calculated.

An official at the country's top economic planning body, the National Development and Reform Commission (NDRC), echoed the view at a press conference on Wednesday, saying that the existence of a large amount of trans-regional economic activities might cause double calculation.

Unlike the calculation of the nations' GDP, where you have customs to clearly define the attribution of added value, it is very difficult to define which part of added value belongs to which provinces in the case of trans-regional economic activities, explained Cong Liang, deputy head of the NDRC's department of national economy.

"In this case, overlapping calculation is unavoidable," he added.

Cong also pointed to price divergence among different regions as a major factor for the gap.

"For a certain product, you have a price in, for instance, Hebei province. But the price of the same product would be different when it is sold in Beijing. However, the NBS statistics are based on a unified nationwide price."