How would it be like if you are unable to trust data from the planet’s second biggest economy; an economy that has weathered the storm of downturn in a manner that envied the developed nations, an economy the world hugely relies on, and in whispers admit that it is the Saviour and a ray of hope.

China is a huge country and being a developing or emerging nation is undergoing pangs of evolution. Many things there are yet to fall in place, including data collection, computing and forecasting.

Only last week, International Energy Agency complained that it was unable to forecast Chinese oil demand (world’s biggest guzzler of oil) in a reliable manner owing to uncertainties with regard to official data.

China, on Tuesday cut down the weightings of food items by 2.2% in the basket of consumer goods in Chinese Consumer Price Index used to measure inflation, and increased the weightings of housing costs by a 4.2 percentage points.

However, the National Bureau of Statistics, entrusted with the data collection and computing in China, did not disclose the components’ absolute weightings in the index. Nor did it informed how the composition of each of the components had changed, leaving analysts to linger around in a zone of guessing.

Also, critics feel that actual prices are not being reflected in the CPI or Consumer Price Index. They point out clothing sector, whose prices in CPI have come down over years. But actually, prices of garments have gone up significantly which is attributed to increasing input costs, including labour costs!

This discrepancy has not escaped public scrutiny.

However, pro-china analysts believe that China is a “large, lumbering, rapidly moving animal that's hard to measure.”

They point to another event:

The country, on Thursday declared that it would refrain from publishing the much awaited Property Price Index and would instead come up with two new indices: one for the second-hand home sales market and the other for the new home sales.

(This makes sense, given a peculiar Chinese trait. In markets like India where property prices regularly appreciate and an inhabited dwelling unit touted as an appreciative investment for the future, China stands apart. There, a house up for second sales gets less of value when compared to a new one. Once you rent a house in China and sell it later on, or once you sell your own property which you have been occupying, chances are less that it would fetch you much!).

Publishing of an accompanying survey has also been halted. If published, the survey would have fetched average property prices in 70 major cities in China.

As per the new move, the National Bureau of Statistics will rely on data sourced from online property registers which are updated by local authorities, with data from real estate agents factored in, from 35 cities. The remaining cities would continue to rely on surveys until new property registers are formed.

The new move would reflect regional prices in a better manner, the bureau argues.

The bureau's previous property data series was depended on information collated from a survey of transactions, all carried out, at a local level. But their representative nature was widely criticized by various quarters. The critics were of the view that sharp increases in housing prices over previous periods have not been reflected in the survey.

So, does this new move a pre-cursor to Chinese data collection and computing taking a new turn; that of things falling in places?

Let’s wait for the next data!

CommodityOnline