Legendary fictitious detective Sherlock Holmes was fond of saying, “When you have eliminated the impossible, whatever remains, however improbable, must be the truth.”
Applying this logic from the Victorian sleuth might just shed light on the curious case of China’s missing data.
But then, as Arthur Conan Doyle’s creation would have firmly said: “Start at the beginning and just tell me the facts.”
Our story begins in the vital export hub of Guangdong.
In a surreal twist, the coastal province has stopped releasing monthly updates of a crucial indicator that gauges growth momentum in the massive manufacturing sector.
The decision was made after the central government’s statistical bureau claimed that the local survey on factory activity, which had been running for seven years, was “illegal.”
To put this into perspective, Guangdong is known for its vibrant high-tech scene and its vast production base. It has also been caught in the crosshairs of China’s trade war with the United States after Washington imposed tariffs worth billions of dollars on Chinese imports.
‘From a legal point of view, the survey conducted by the Guangdong Department of Industry and Information Technology was an illegal activity and we’ve demanded that the Guangdong statistics authority resolve the matter’
Still, the decision by the National Bureau of Statistics has raised a few eyebrows.
In a statement published on its website, the NBS stressed that the provincial purchasing managers’ index, or PMI, was produced without prior permission and broke state “law.”
It went on to reveal that “unidentified sources” had reported “at the end of October that Guangdong” was “releasing the PMI without approval.”
“From a legal point of view, the study conducted by the Guangdong Department of Industry and Information Technology was an illegal activity and we’ve demanded that the Guangdong statistics authority resolve the matter in accordance with relevant laws and regulations,” the NBS stated.
What makes this ruling strange is that the Department of Industry and Information Technology PMI had been trending lower than the overall official index for five straight months before the NBS called time on the numbers.
Analysts are now wondering whether the monthly survey will reappear in the near future.
“The PMI is a key economic indicator for the market, and any move to tighten [control over] it would affect the confidence of the market and enterprises,” Shen Jianguang, the chief economist at JD Finance, told the South China Morning Post.
“The mainland economy is under pressure, as we see consumer and factory data are very weak. Actual private sector and consumer demand are weakening. The absence of the economic data would only exacerbate suspicion” about the true condition of the economy, Shen added.
Ah, Holmes would have probably said, “it is a capital mistake to theorize before one has data. Insensibly one begins to twist facts to suit theories, instead of theories to suit facts.”
Or, “elementary,” my dear readers.