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

Lisa Lucas Takes The Reins At The National Book Foundation

Lucas is the third executive director in the history of the foundation, which runs the National Book Awards. Her priority? Inclusivity: "Everyone is either a reader or a potential reader," she says.
NPR

The Shocking Truth About America's Ethanol Law: It Doesn't Matter (For Now)

Ted Cruz doesn't like the law that requires the use of ethanol in gasoline. So what would happen if it was abolished? The surprising answer: not much, probably.
NPR

GOP Candidates Head To South Carolina After Trump Victory In New Hampshire

With the New Hampshire primary doing little to settle the GOP race, presidential candidates headed straight to South Carolina on Wednesday to start campaigning ahead of the state's primary in 10 days.
NPR

Twitter Tries A New Kind Of Timeline By Predicting What May Interest You

Twitter has struggled to attract new users. Its latest effort at rejuvenation is a new kind of timeline that predicts which older posts you might not want to miss and displays them on top.

Leave a Comment

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