Policymakers are responding to public complaints again and media criticism of soaring housing prices with steps ranging from ordering scores of central State-owned enterprises to immediately withdraw from the heated real estate market to discussing possibilities of introducing a new property tax.
Compared with most such symbolic moves, however, the action the National Bureau of Statistics (NBS) is taking to make the consumer price index (CPI) reflect reality more closely was more intensely needed. If China is to avoid serious inflation and property bubbles, the statistical authorities have to come up with authentic economic data to support key policymaking.
The NBS will reportedly give more weight to factors of mortgage loan rate and home prices while calculating the CPI, the main gauge of inflation, starting next year. The bureau said it had already lifted the weight of residence criterion in its CPI calculation from 14 percent in late 2009 to nearly 15 percent this year in order to better reflect structural changes in consumption.
At first glance, the move looks like a crisis-management response after doubts were cast on the bureau for claiming early this year that China's average home prices had risen by a mere 1.5 percent for the whole of 2009. Given the actual hike of housing prices in most Chinese cities, the bureau practically became a laughing stock.
But the move, as a major step toward reflecting the accurate picture of price level, carries more significance than just a face-saving action for the bureau.
Since the global financial crisis has made it more urgent than ever for China to change its development model, growth and structural changes in domestic consumption can only be expected to accelerate. If the government's efforts to boost consumption and prevent inflation and asset bubbles are to make sense, relevant statistics will be mandatory for related policymaking.