SUN
WUKONG Lies, damn lies and
statistics By Wu Zhong, China
Editor
HONG KONG - People in Guangzhou
these days can be excused if they feel completely
confused by conflicting official statistics about
which direction housing prices are moving in the
capital of southern China's Guangdong province.
On April 14, the Guangzhou Municipal
Bureau of Land Resources and Housing Management
released a market analysis. Statistics
in
the report said the average price of newly built
commercial residential housing in March was 7,029
yuan (US$907) per square meter, down 9.1% or 700
yuan from February. This was the largest monthly
drop since last year.
It should be pointed
out that the report was released after Guangzhou
Mayor Zhang Guangning pledged to curb the rise in
housing prices, saying it was now a "political
issue". After Zhang's remarks, the Guangzhou
municipal government unveiled tougher measures to
cool down the property market.
However,
just three days later, on April 17, the National
Development and Reform Commission (NDRC), China's
top economic-planning body, published its own
statistics about housing prices in 70 Chinese
cities, including Guangzhou, which showed average
housing prices in these cities continued to rise
in March.
According to the NDRC, the
average price of newly built commercial
residential housing in these 70 cities rose about
6% in March year on year and 0.5% month on month.
In Guangzhou, in particular, the average
housing price in March grew 8.6% from a year ago,
and 1.2% from February. Both year-on-year and
month-on-month growth rates in Guangzhou were
higher than the average of the 70 cities.
In face of these two sets of official
statistics, Guangzhou citizens simply feel at a
loss to know what to do.
A Guangzhou
resident named Zhou, who plans to buy an apartment
in the urban area, has become wary about entering
the market after reading the conflicting
statistics.
"If the housing price in the
city tends to go down, I'll wait for a while so I
can pay less. However, if the price tends to go
up, I think the sooner I buy an apartment the
better, because I may have to pay more later.
Which statistics should I believe?" he said.
Real-estate brokers feel puzzled by the
figures of the Guangzhou land and housing
authority. They say that according to housing
transactions they handled in March, the average
price should be up rather than down, compared with
either a year or even a month ago.
Grilled
by the media, officials with the Guangzhou
Municipal Bureau of Land Resources and Housing
Management came out to explain their statistics.
But they also offered conflicting explanations
that further confused the public.
Liu
Jiarui, a spokesman for the Guangzhou land and
housing authority, said: "The change in
Guangzhou's housing price in March is a structural
change. Our previous statistics [of Guangzhou's
housing price] did not take into account housing
prices in the Huadu and Panyu districts. But in
March, these two districts were added for the
first time."
Huadu and Panyu are two
suburban districts where housing prices are much
lower than those in the urban areas of Guangzhou.
Statistically, with housing prices in the two
districts taken into account, the average housing
price in Guangzhou surely would be lower.
But just one day later, an anonymous
official with the Guangzhou land and housing
authority briefed the local media to make a
clarification, saying that its statistical
methodology had never changed. "Huadu and Panyu
have always been included in our statistics of
average housing price in Guangzhou," the official
was quoted as saying.
Then how to explain
the decline of average housing price in March? The
official said it was because sales in urban areas
dropped because of their high prices, while
transactions in suburban areas and low-cost
housing went up. "After the Chinese New Year
holiday, many Guangzhou citizens rushed to buy
housing in the suburban areas."
While such
an explanation is plausible, so far no one with
the Guangzhou land and housing authority has come
out to explain why its statistics are so different
from those of the NDRC's.
One can only
assume that the statistical methodology used by
the NDRC and the Guangzhou authority may be
different, resulting in the different results.
However, calculating average housing price in a
city does not involve complicated methodology. So
a more likely reason is that the difference is
derived from the sampling data that were gathered
for calculation.
Nevertheless, there are
reasons to believe that the NDRC's statistics are
more reliable. For one thing, the NDRC's
statistics provide the basis for the central
government to formulate its macroeconomic
policies. If its statistics are mistaken, Beijing
could be misled into producing wrong policies.
Moreover, some local officials are
notorious for manipulating economic statistics to
serve their own interests. Gross domestic product
is a good example. Misreporting is so rampant that
the National Bureau of Statistics is planning to
calculate regional GDP figures directly, keeping
local officials' hands off the matter.
If
the NDRC's statistics about Guangzhou's housing
price are closer to the truth, then suspicion can
be raised that Guangzhou officials may have
manipulated statistics for "political
correctness", after Mayor Zhang stressed housing
as "a political issue".
Housing prices in
Guangzhou are high, yet continue to go up rapidly,
which has become a major concern. Housing is now
not just an economic or social problem, but rather
a political issue," Zhang said at a government
meeting in March, as reported by Asia Times Online
(see Guangzhou aims to cool property
market, April 12).
In China,
skyrocketing housing, education and medical-care
costs have become the three major sources of
growing public discontent. The central government
has imposed macroeconomic controls for the past
three years with a goal of cooling down the
property market. However, property markets in
major cities remain defiant, continuing to hit new
highs.
In a few months, the Chinese
Communist Party is to hold its 17th National
Congress, which is expected to adopt President Hu
Jintao's idea of building a "harmonious society"
as the new party line. It is expected that Beijing
will tackle problems deemed to be a threat to
"social harmony", to win public support.
Analysts say Zhang's words show that
Guangzhou's government now realizes that it would
be "politically incorrect" if it failed to
implement the central government's macroeconomic
controls to curb housing prices. Thus the
statistics released by the city's land and housing
authority were obviously aimed at impressing
people that the local government measures took
effect immediately in bringing down housing price
after Zhang made his toughly worded remarks.
In fact, an opinion poll co-sponsored by
Beijing-based China Youth Daily on public reaction
over Zhang's remarks showed that 55% of the 6,488
respondents declined to believe housing prices
would go down easily because of Zhang's hardened
attitude. Slightly fewer than 40% said they were
"hopeful to see the market cool down".
Therefore, this may be just another
example to illustrate how economic statistics can
be easily manipulated by local officials to serve
a political purpose or local interests. China
needs to set up unified standards for calculating
the average housing price in a city, so as to
avoid confusion.
(Copyright 2007 Asia
Times Online Ltd. All rights reserved. Please
contact us about sales, syndication and republishing.)
Head
Office: Unit B, 16/F, Li Dong Building, No. 9 Li Yuen Street East,
Central, Hong Kong Thailand Bureau:
11/13 Petchkasem Road, Hua Hin, Prachuab Kirikhan, Thailand 77110
