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Friday, 27 August 2010

Gain and Grain

In a previous post, Sino-Gist mentioned an independent Chinese report which found that officials received 5.4 trillion yuan in 'gray income' (money gained through corruption, bribery etc.) in 2009, with the growth in levels of such income exceeding that of GDP. Since their release, the findings have caused controversy, with individuals from the National Bureau of Statistics (NBS) suggesting that the problem has been overstated.

While nobody would deny that corruption exists in Chinese society, NBS officials are unconvinced over the reliability of the findings in the 'Gray Income and National Income Distribution' report, which puts 'gray income' levels about 90% higher than the NBS' own estimates. According to the People's Daily, one NBS analyst wrote on the Bureau's website that “there are many flaws in the report, such as how the samples were chosen and calculations made, and the final result is significantly higher (than the actual level)”. Such 'flaws' include the fact that the independent researchers analysed only 4,909 households (7.6% of the total looked at by the NBS), and that the survey sample was hand-picked rather than being drawn randomly.

However, as Andrew Batson comments on the Wall Street Journal's 'China Real Time Report':

It’s become increasingly widely accepted among researchers that better-off Chinese people not only hide their money from the taxman, they also don’t honestly answer the survey questions that government agencies use to figure out household incomes. The clear implication is that official income figures are too low.

Thus, while some from the NBS take issue with the figure of 5.4 trillion yuan, Andrew Batson's article suggests the problems with official statistics implied in the independent report are not being dismissed out of hand. With any luck, the NBS will be able to use it to improve its own statistical surveys in the future.


According to an article from the People's Daily, Zhang Ping (head of the National Development and Reform Commission) is aiming to increase China's annual grain output to 550 million tonnes by 2020 (with the 2009 figure standing at 530.8 million tonnes). China has an approach of remaining 95% self-sufficient in its food supply. Thus, with its expected demand for grain due to rise to over 570 million tonnes by 2020, Zhang's target figure would ensure that China maintains its levels of self-sufficiency for the forseeable future.

To realise this, Zhang's report to the current session of the National People's Congress announced further investment in farming infastructure and high-yield technologies. In addition, according to Zhang, the coming years will also see improvements in the way the agricultural sector copes with environmental disasters, which are likely to become more frequent in the future.

China's aim of being 95% self-sufficient in food supply is clearly intended to secure China's position as worldwide pressure on food resources grows in the coming decades. However, with its expanding population and consumption needs, whether or not China will be able to stick to this target is doubtful. There will come a point when grain production peaks, at which time the country will need to start looking to other countries to make up an expanding shortfall. In much the same way as with the exhaustion of the Daqing oilfields in the early 1990s, China will move very quickly from a position of security to one of dependance- a situation that could add an interesting dynamic to international relations.

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