Is Jaswant Singh having the last laugh? On January 21 this year he created a stir while addressing an international audience in the capital when he said that China was "fudging" its growth numbers. Now, along come The Economist of the UK and Newsweek of the US with long articles that question China's national output, or GDP, statistics in particular.

It has generally been recognised that Chinese growth is exaggerated by at most 2 percentage points: that is, when the Chinese claim a 9 per cent rate of economic growth during 1978-97, it could well be 7 per cent, a great feat nevertheless considering that it is an annual compound rate of increase. But now there are far more serious accusations and the man to first give international respectability to these charges is an eminent American economist and China scholar, Thomas Rawski of the University of Pittsburgh. Since early 2000, Rawski has been writing extensively on the dubiousness of recent Chinese growth figures. He believes that the problems started in 1998 after the East Asian crisis, when,
faced with the prospect of declining growth in exports and foreign investment, Chinese Prime Minister Zhu Rongji launched a personal crusade for an 8 per cent rate of economic growth terming it a "great political responsibility".

Shorn of all technical detail, what Rawski says is that China's reported GDP growth during 1998-2001:

• implies a drop in energy use and an increase in energy efficiency which is simply inconceivable;

• is based on an increase in farm output that could not have been realised given the extensive natural disasters that hit China in recent years;

• is not consistent with the sharp fall in investment spending and with the indifferent growth in retail sales.

Rawski's own estimates are that in 1998 and 1999, the Chinese economy may well have had a negative growth rate of around 2 per cent. In 2000, as against the official figure of 8 per cent, Rawski estimates a 2-3 per cent growth and in 2001, as against the 7.9 per cent claim, the alternative "realistic" estimate is 3-4 per cent. Interestingly, Rawski's doubts are based extensively on Chinese official, academic and media sources of criticism. The major culprit seems to be the data being generated by local and provincial governments. Chinese scholars have been writing about a "wave of deliberate falsification and embellishment", comparable to the harvest data during the disastrous Great Leap Forward in the late 1950s which hid 25-35 million famine deaths from the public for almost three decades.

However, in an e-mail to Kautilya a few days back, Nicolas Lardy, a distinguished American economist on China currently at Washington's Brookings Institution and author of the just released Integrating China into the World Economy, points out that:

China's import growth in the past four years does not support the contention that the economy is contracting or sharply decelerating. This import data is consistent with export figures in trading partner countries like the US.

Monetary growth has been substantial and if real output is falling as Rawski claims, this should have resulted in increasing inflation. This has not happened.

If GDP growth is falling then family incomes should also be declining. But household savings have been growing, a sign of an expanding, not collapsing economy.

The debate will go on. Doomsday books like Gordon Chang's recent The Coming Collapse of China will continue to hit the stands. But what should not be missed is the tangible nature of Chinese growth. Poverty and backwardness still prevail widely but the spectacular pace of change is visibly evident. Visually, China's performance is simply awesome. Even our 8 per cent growth regions of Gujarat and Maharashtra or the Bangalores and Hyderabads do not come anywhere close to what can be seen in China. That is primarily because growth is being accompanied by massive urban renewal and frenzied construction activity, unlike in India. Further, China continues to extend its dominance in labour-intensive mass manufacturing like consumer goods, toys, personal appliances and gadgets and textiles. It has also, with the help of Taiwanese firms, become the world's third largest power in it hardware. "Made in China" is ubiquitous. The debate on GDP numbers cannot gloss over this achievement which has been denied to India because of its policy stupidities.

Our own statistical system, once the envy of the world, is in a shambles as brought out vividly in the voluminous report of a high-level National Statistical Commission chaired by noted economist C. Rangarajan, now the governor of Andhra Pradesh. Worse, the Government has done nothing so far about its recommendations that were submitted over seven months ago. Meanwhile, the credibility of our own growth numbers continues to take a severe knock.

(The author is with the Congress party. These are his personal views)