Official statistics clearly cannot be trusted
A story in CityAM this morning will make for uncomfortable reading in Downing Street. The latest business survey from the BDO consultancy has found that more than half of UK firms are worried about reliable access to vital inputs. Supply chain disruptions and labour shortages have already stoked inflation, so the fact that so many producers anticipate further problems is bad news.
Even worse, there’s only so much that our government can do about the root causes. For instance, a deal on the Northern Ireland Protocol may ease Brexit-related impediments to trade, but Rishi Sunak is entirely without influence when it comes to the Covid pandemic in China. Indeed, the entire West has been helpless as the factories and ports that we foolishly rely on have been shut down by Chinese government diktat.
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Last year, Xi Jinping finally abandoned the impossible goal of Zero Covid. To Western relief, draconian restrictions were lifted across China. However, because the Chinese workforce is inadequately vaccinated and thus vulnerable to the virus, the worry is that the disease itself will now disrupt production.
So just how bad is the Chinese Covid surge? According to official sources, the toll of Covid-linked deaths between the 8th December and the 12th January was 60,000. That is obviously tragic in human terms, but remarkably low given a population of 1.3 billion. The question, though, is whether we can trust these figures.
An investigation by the New York Times suggests that the Chinese Government is undercounting the true extent of the surge. To get an unfiltered view of the situation, the NYT team “examined the obituaries published over the past four years by the state-backed Chinese Academy of Engineering and the Chinese Academy of Sciences.”
Between them these institutions have about 1,700 members. Many of them are elderly, so — as one might expect — in most months a few of them pass away. Prior to the lifting of lockdown the monthly toll, indicated by number of obituaries published, was between zero and six. However, there was a dramatic change following the end of the Zero Covid policy. In December 2022, 23 obituaries were published, and in January 2023, there were 17.
The authors of the article acknowledge that the data used in their study is “far from conclusive” — but if the pattern is in any way indicative of the Chinese population as a whole, the death toll must be much higher than the official figures suggest. We can also be sure that much larger numbers of people are getting sick. We should therefore expect further disruption to global supply chains.
There’s a wider lesson here, which is that despite making ourselves materially dependent on the Chinese economy — and thus the policies of the Chinese state — we cannot trust their official figures. While Western conspiracy theorists may go over the top when it comes to the mendacity of our own governments, a high level of mistrust is entirely appropriate when it comes to the Beijing regime.
And it’s not just the Covid statistics that we should doubt. Other sensitive matters, like the real rate of Chinese economic growth or the indebtedness of the country’s property sector, should be open to question. And perhaps most importantly, there is what Beijing claims about Chinese birth rates. It’s not impossible that these are disastrously lower that what is officially claimed.
Though we’ve long feared China — given its rising power and atrocious human rights record — we also need to fear for China. At the very least, we must ask ourselves whether this hybrid communist-capitalist state provides a secure foundation for the global economy.