A new book methodically peels back the layers of China's statistical machine to provide new insights into the nation's burgeoning economy
For some, wading through Chinese economic data is like wrapping your head around the Talmud. The credibility of the data itself often invites skepticism from observers both inside and outside China. Yet there's little choice but to rely on the official numbers. And China's regular data dump in the middle of each month moves markets in a way that few countries can. If the market has little faith in Chinese statistics, then why all the focused attention? How does one make sense of Chinese data and its idiosyncrasies?
Many of the answers can be found in the eminently useful Understanding China's Economic Indicators, a new book from Tom Orlik, economic journalist/columnist for the Wall Street Journal. (According to his bio, Orlik has earned the unique distinction of having one of his essays on Chinese statistics be required reading by the National Bureau of Statistics staff.) This is not a "big argument" book on China, but one that methodically peels back the layers of the Chinese statistical machine to yield insights on what the data mean, how they're collected, and what the current shortcomings are. You want to know how the Chinese calculates GDP and fiscal revenue, that's chapter two. You want to know about the country's gold and foreign exchange reserves accumulation, flip to chapter five. Still don't quite understand the composition of China's consumer price index? Don't feel bad, no one really does, as you'll discover in chapter seven. This book is the story of a year with Chinese economic data.
I particularly liked the opening vignette that described a gaggle of Chinese and foreign journalists awaiting the announcement of the 2009 fourth quarter GDP. The anticipation was palpable, torturous seconds ticked by as each reporter is poised to pounce on the final revelation of the figure to phone back to their editors--the economic press in China is all cut-throat competition. And hallelujah, it's 10.7% year-over-year growth, which put the annual growth at 8.7%. Yes! China got the 8% it promised it would deliver at the beginning of the year. In Zhongnanahi, Wen Jiabao smiled and sipped some oolong tea (OK, I made up this last part). Sure, it is admittedly a tad bit nerdy, but in just the right way, especially if you're someone who's really into Chinese economic data (like moi).
So what of the credibility of Chinese data? Orlik takes a similar view to what I argued in response to Megan McArdle's dispatch last year that appeared more about highlighting Hayek than understanding how the Chinese stats system actually functioned. Orlik concludes:
The reality of China's economic data today is not the crude controlling hand of the Politburo dictating the GDP growth figure. It is an increasingly reliable and comprehensive set of economic indicators that remain compromised in some areas by the difficulty of measuring a rapidly changing economy, imperfect surveying methods, a recalcitrant sample set, and continued political sensitivity surrounding some numbers. The system is not perfect. Some data points are more reliable than others. But neither is it a farce. As shown by the mad scramble for the GDP data in the State Council Information Office and the bilions of dollars that are traded instantly on its release, the shortcomings in the data are no impediment to the market reaction.
China has certainly come a long way since the Great Leap Forward days, when complete fabrication of grain production volumes to serve political goals resulted in one of the worst man-made famines in modern history--a point that Orlik discusses at some length. Top policymakers and leaders now rely on numerous data to assess the economy and determine the best course for policy. The very realities of governing a large and dynamic economy requires much less tolerance for outright falsities. Of course, the statistics system still plays catch-up to an economy that is sprinting ahead of it, making the data far from perfect.
Some were surprised by one of the Wikileaks cables that caught Vice Premier Li Keqiang mocking his provincial-level GDP figures as unreliable. It shouldn't have been a surprise. Since the late 1990s, using electricity consumption as a proxy for economic activity has remained a fairly normal practice at both the central and local levels. Relying on "proxy indicators" for GDP growth is one way by which the central leaders counter what they know to be potential local-level doctoring--or "add water" (加水) in Chinese parlance--of their stats, leading to inflated GDP and other growth metrics. Orlik explains some of these proxies in detail.
One reason that electricity consumption has correlated relatively well with economic growth is because industry is by far the largest consumer of power, at perhaps 70 or 75%. As the last decade has been basically defined by China's hyper industrialization phase, capturing a large enough slice of industries--which are massive energy guzzlers--meant you had a rough, but imprecise, picture of the broader economy. The key question over the next decade is whether this correlation breaks down, as China aspires to restructure its economy toward a less industry-led growth model. That is indeed a major pillar of the 12th Five-Year Plan.
If China succeeds in the transition, I suspect Orlik will have to publish an updated edition of his guide to Chinese economic data.
Damien Ma is a fellow at the Paulson Institute, where he focuses on investment and policy programs, and on the Institute's research and think-tank activities. Previously, he was a lead China analyst at Eurasia Group, a political risk research and advisory firm.
New research confirms what they say about nice guys.
Smile at the customer. Bake cookies for your colleagues. Sing your subordinates’ praises. Share credit. Listen. Empathize. Don’t drive the last dollar out of a deal. Leave the last doughnut for someone else.
Sneer at the customer. Keep your colleagues on edge. Claim credit. Speak first. Put your feet on the table. Withhold approval. Instill fear. Interrupt. Ask for more. And by all means, take that last doughnut. You deserve it.
Follow one of those paths, the success literature tells us, and you’ll go far. Follow the other, and you’ll die powerless and broke. The only question is, which is which?
Of all the issues that preoccupy the modern mind—Nature or nurture? Is there life in outer space? Why can’t America field a decent soccer team?—it’s hard to think of one that has attracted so much water-cooler philosophizing yet so little scientific inquiry. Does it pay to be nice? Or is there an advantage to being a jerk?
Some fans are complaining that Zack Snyder’s envisioning of the Man of Steel is too grim—but it’s less a departure than a return to the superhero’s roots.
Since the official teaser trailer for Batman v Superman: Dawn of Justice debuted online in April, fans and critics alike have been discussing the kind of Superman Zack Snyder is going to depict in his Man of Steel sequel. The controversy stems from Snyder’s decision to cast Superman as a brooding, Dark Knight-like character, who cares more about beating up bad guys than saving people. The casting split has proved divisive among Superman fans: Some love the new incarnation, citing him as an edgier, more realistic version of the character.
But Snyder’s is a different Superman than the one fans grew up with, and many have no problem expressing their outrage over it. Even Mark Waid, the author of Superman: Birthright (one of the comics the original film is based on), voiced his concern about Man of Steel’s turn toward bleakness when it came out in 2013:
The Islamic State is no mere collection of psychopaths. It is a religious group with carefully considered beliefs, among them that it is a key agent of the coming apocalypse. Here’s what that means for its strategy—and for how to stop it.
What is the Islamic State?
Where did it come from, and what are its intentions? The simplicity of these questions can be deceiving, and few Western leaders seem to know the answers. In December, The New York Times published confidential comments by Major General Michael K. Nagata, the Special Operations commander for the United States in the Middle East, admitting that he had hardly begun figuring out the Islamic State’s appeal. “We have not defeated the idea,” he said. “We do not even understand the idea.” In the past year, President Obama has referred to the Islamic State, variously, as “not Islamic” and as al-Qaeda’s “jayvee team,” statements that reflected confusion about the group, and may have contributed to significant strategic errors.
19 Kids and Counting built its reputation on preaching family values, but the mass-media platforms that made the family famous might also be their undoing.
On Thursday, news broke that Josh Duggar, the oldest son of the Duggar family's 19 children, had, as a teenager, allegedly molested five underage girls. Four of them, allegedly, were his sisters.
The information came to light because, in 2006—two years before 17 Kids and Counting first aired on TLC, and thus two years before the Duggars became reality-TV celebrities—the family recorded an appearance on TheOprah Winfrey Show. Before the taping, an anonymous source sent an email to Harpo warning the production company Josh’s alleged molestation. Harpo forwarded the email to authorities, triggering a police investigation (the Oprah appearance never aired). The news was reported this week by In Touch Weekly—after the magazine filed a Freedom of Information Act request to see the police report on the case—and then confirmed by the Duggars in a statement posted on Facebook.
Why agriculture may someday take place in towers, not fields
A couple of Octobers ago, I found myself standing on a 5,000-acre cotton crop in the outskirts of Lubbock, Texas, shoulder-to-shoulder with a third-generation cotton farmer. He swept his arm across the flat, brown horizon of his field, which was at that moment being plowed by an industrial-sized picker—a toothy machine as tall as a house and operated by one man. The picker’s yields were being dropped into a giant pod to be delivered late that night to the local gin. And far beneath our feet, the Ogallala aquifer dwindled away at its frighteningly swift pace. When asked about this, the farmer spoke of reverse osmosis—the process of desalinating water—which he seemed to put his faith in, and which kept him unafraid of famine and permanent drought.
In an interview, the U.S. president ties his legacy to a pact with Tehran, argues ISIS is not winning, warns Saudi Arabia not to pursue a nuclear-weapons program, and anguishes about Israel.
On Tuesday afternoon, as President Obama was bringing an occasionally contentious but often illuminating hour-long conversation about the Middle East to an end, I brought up a persistent worry. “A majority of American Jews want to support the Iran deal,” I said, “but a lot of people are anxiety-ridden about this, as am I.” Like many Jews—and also, by the way, many non-Jews—I believe that it is prudent to keep nuclear weapons out of the hands of anti-Semitic regimes. Obama, who earlier in the discussion had explicitly labeled the supreme leader of Iran, Ayatollah Ali Khamenei, an anti-Semite, responded with an argument I had not heard him make before.
“Look, 20 years from now, I’m still going to be around, God willing. If Iran has a nuclear weapon, it’s my name on this,” he said, referring to the apparently almost-finished nuclear agreement between Iran and a group of world powers led by the United States. “I think it’s fair to say that in addition to our profound national-security interests, I have a personal interest in locking this down.”
Advocates say that a guaranteed basic income can lead to more creative, fulfilling work. The question is how to fund it.
Scott Santens has been thinking a lot about fish lately. Specifically, he’s been reflecting on the aphorism, “If you give a man a fish, he eats for a day. If you teach a man to fish, he eats for life.” What Santens wants to know is this: “If you build a robot to fish, do all men starve, or do all men eat?”
Santens is 37 years old, and he’s a leader in the basic income movement—a worldwide network of thousands of advocates (26,000 on Reddit alone) who believe that governments should provide every citizen with a monthly stipend big enough to cover life’s basic necessities. The idea of a basic income has been around for decades, and it once drew support from leaders as different as Martin Luther King Jr. and Richard Nixon. But rather than waiting for governments to act, Santens has started crowdfunding his own basic income of $1,000 per month. He’s nearly halfway to his his goal.
The mock metropolis is meant to have everything but people who live there.
Grigory Potemkin, the 18th-century war hero and nobleman, was also Catherine the Great’s lover and military advisor. According to ubiquitous legend, Potemkin fabricated villages along the banks of the Dnieper River in a bid to impress her. Historians aren’t convinced that Potemkin really constructed entire fake villages, their facades illuminated by enormous bonfires—but the concept may not be so far-fetched.
These days, when people talk about a Potemkin village, they’re usually referring to a ruse to make something appear better than it actually is. It’s a useful metaphor, but also a reflection of people’s fascination with fake cities and questions about the line between authenticity and artificiality in man-made environments.
Sean Wilentz discusses his latest book, "Bob Dylan in America," which describes the singer's influence on our nation's culture
Nearly half a century after he released his first album, Bob Dylan continues to release new albums (including, last year, a compilation of Christmas songs) and tour the country playing concerts. Sean Wilentz, an American history professor at Princeton University and "historian-in-residence" at BobDylan.com, traces Dylan's influence on American culture in his new book, Bob Dylan in America. Here, he discusses how Dylan shaped his generation—and whether there's a similar artist in today's music scene.
The book is called Bob Dylan in America. What's Dylan's place in our nation's cultural history history?
He's the most important songwriter of the last 50 years, in a culture in which songwriting has always been a major force, a major component.