Wednesday, July 25, 2007

Chinese Statistics

As Econbrowser points out, there remains good reason to be curious (and skeptical) of what comes out of Chinese government processes.

I accept that China is growing like no other nation ever seen on the face of the planet. I also attach a much wider confidence interval to estimates from China than I do to pieces of data coming from Statscan or OECD countries in general.
In other words, the process is one big black box.

The one thing I would like answered about China is their peculiar habit of raising interest rates by individual basis points. In North America, you can count on central bank moves being a multiple of 25 - rates go from 4.25, 4.5, 4.75, etc.
...spurred further action by the PBoC; it moved to raise interest rates yet again, to 6.57 percent.

One wonders how they determine that level of precision.

See also this previous post.

1 comment:

menzie chinn said...

There are two competing explanations for why the PBoC raises interest rates in increments of 27 bps. Note that 27 is divisible by 9. One reason given is that this means financial calculations can be easily conducted on an abacus (so it's a QWERTY type of leftover). The second is that it's related to Chinese numerology. 9 in Mandarin Chinese is pronounced "jiu" which also sounds like the word for "longevity". I can't say I know enough to say which one is the more relevant answer.