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I see that there is a lack of statistical correlation on trade and
investment between The Philippines and China. China apparently says
that it exports and invests $30 billion in the Philippines whereas
the Philippines records Chinese imports and investment at $8
billion—a significant difference. In August 2005 it was predicted
that there would be a two way trade value of $30 billion between the
Philippines and China by 2010; given also that the Philippines
foreign trade value is about $100 billion for year it looks unlikely
that the latest reported Chinese claim of $30 billion a year is
correct.
Much reliance is placed on statistics of this
type. I remember once researching the sources of Foreign Direct
Investment into the Philippines in one particular year to find that
most foreign direct investment had in fact come from the British
Virgin Islands, a group of 15 inhabited islands in the Caribbean
with a total population of 22,000, in which tourism accounts for 45
percent of Gross National Income. Of course the British Virgin
Island also has a big business in financial services and it is for
this reason that it can claim to be a major overseas foreign
investor, companies register there as it has a more relaxed
taxation/corporate reporting regime than do many other places, and
those companies invest overseas. Major multinationals are owned by
shareholders of all sorts of nationalities; Shell until recently had
two head offices, one in London UK, and the other in The Hague,
Netherlands—is Malampaya truly a British investment ? Does the
People’s Republic of China include trade with Taiwan (the
“renegade province”) in its trade statistics, after all it
seriously claims Taiwan as being a part of the PRC.
This is all to say that people make major plans
in reliance on statistical information, which is widely publicized
and often used for political point scoring. If such numbers can be
as wrong as shown in the example above of Chinese trade statistics
with the Philippines, then is there not a major risk that people are
often planning on ill founded bases? The interesting thing
was, in the report I read about the Philippines-China trade numbers,
in the political debate arising from the numerical difference nobody
seemed to be too certain as to which number was the correct
one!—there were apparently some intelligent observations made but
without any certainty, the statistical people were asked to go back
and check their numbers. It’s all a bit worrying, billions of
dollars and enormous amounts of effort and geopolitical (and
business) “strategizing” rest on these types of numbers and even
if they were a little bit inaccurate or not properly understood, all
sorts of mistakes could be made—I suspect they often are. The
whole Millennium Development Goals are founded on statistical
“evidence” and “indicators.”
It’s easy to be glib with statistics,
particularly in national and international political debate (where
statistics can be used to gain advantage). Numbers quoted need to be
fully understood before they are taken as credible and frequently
they are not, there is a heavy responsibility on the statisticians
to ensure that the users of their products are fully briefed, even
though the way in which the numbers are used is usually outside
their control!
What was that about China’s GDP growth
statistics?!
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mawootton@gmail.com
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