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No One Trusts China's Unemployment Rate

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 2021 NPR. To see more, visit https://www.npr.org.

Zoe Chace explains the mysteries of the global economy for NPR's Planet Money. As a reporter for the team, Chace knows how to find compelling stories in unlikely places, including a lollipop factory in Ohio struggling to stay open, a pasta plant in Italy where everyone calls in sick, and a recording studio in New York mixing Rihanna's next hit.
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