No One Trusts China's Unemployment Rate | WAMU 88.5 - American University Radio

No One Trusts China's Unemployment Rate

Play associated audio

Ask an economist like Eswar Prasad, who used to work at the International Monetary Fund, "So, do you know, what the unemployment rate in China is?"

And he'll answer, "We don't."

The official unemployment rate, put out by the government, Prasad says, is 6.5 percent, but according to him, "that number has no credibility at all."

He's not the only dubious one.

"The unemployment rate in China is one of the most useless and ridiculous statistics out there," says macroeconomic researcher Arthur Kroeber of Dragonomics. "No one pays any attention to it, because everyone knows it's a complete fiction."

It's not like China isn't trying. It has a national statistics office that works very hard. But the country is so big, and changing so quickly, that it is actually really hard to keep track of what is going on.

Kroeber suggests proxies. He thinks China should count the number of shipping crates, how many tons of coal being shipped, the amount of electricity production, and floor space being built at any given time. "Those numbers," he says, "are harder to fudge."

Everyone in the world wants to do business in China. And China itself wants to know more about how its own economy is changing. But it takes decades to develop sophisticated statistical models that can give trustworthy figures.

Statistics that apply to an export-only oriented economy aren't good enough to capture the complexity of a place like China. So, the country is still working at figuring out how to count itself.

In the meantime, Western firms have jumped in and started in their calculations, using methods perfected in the United States. But anytime you try to sum up an incredibly complex economy with one number — you're going to have some controversy.

Copyright 2012 National Public Radio. To see more, visit http://www.npr.org/.

NPR

Out Of Ukraine, This 'Suitcase' Packs An Immigrant's Story With Humor

Ari Shapiro talks with first-time novelist Yelena Akhtiorskaya about her book, Panic in a Suitcase.
NPR

Farming The Bluefin Tuna, Tiger Of The Ocean, Is Not Without A Price

Scientists are trying to raise prized bluefin tuna completely in captivity. An experiment at a Baltimore college is the first successful attempt in North America.
NPR

Senate's Highway Trust Fund Bill Sets Up Conflict With The House

A short-term fix for the nearly empty Highway Trust Fund is a step closer to President Obama's desk. Congress has been talking about the long-term problems with the construction account, but the two chambers have not agreed on a long-term solution.
NPR

OkCupid Sometimes Messes A Bit With Love, In The Name Of Science

OkCupid, the online dating site, disclosed Monday that they sometimes manipulate their users' profiles for experiments.

Leave a Comment

Help keep the conversation civil. Please refer to our Terms of Use and Code of Conduct before posting your comments.