Report on the Technical Assistance Evaluation Mission to the People's Republic of China

As part of the IMF Statistics Department (STA)' s program to evaluate its technical assistance (TA) and training provided to member countries, and with the support of the Chinese authorities and the Fund’s Asia and Pacific Department (APD), a TA/training evaluation mission visited China during March 16-20, 2009. The objectives of the mission were to: (1) evaluate the effectiveness of STA’s TA and training to China during the period 2003-2008; (2) elicit China’s views on how to broaden and enhance the technical cooperation between STA and China; (3) consider the role of the General Data Dissemination System (GDDS) in support of China’s statistical development; and (4) discuss TA and training priorities for the next two years.

Abstract

As part of the IMF Statistics Department (STA)' s program to evaluate its technical assistance (TA) and training provided to member countries, and with the support of the Chinese authorities and the Fund’s Asia and Pacific Department (APD), a TA/training evaluation mission visited China during March 16-20, 2009. The objectives of the mission were to: (1) evaluate the effectiveness of STA’s TA and training to China during the period 2003-2008; (2) elicit China’s views on how to broaden and enhance the technical cooperation between STA and China; (3) consider the role of the General Data Dissemination System (GDDS) in support of China’s statistical development; and (4) discuss TA and training priorities for the next two years.

Executive Summary

As part of the IMF Statistics Department (STA)’ s program to evaluate its technical assistance (TA) and training provided to member countries, and with the support of the Chinese authorities and the Fund’s Asia and Pacific Department (APD), a TA/training evaluation mission visited China during March 16–20, 2009.2 The objectives of the mission were to: (1) evaluate the effectiveness of STA’s TA and training to China during the period 2003–2008; (2) elicit China’s views on how to broaden and enhance the technical cooperation between STA and China; (3) consider the role of the General Data Dissemination System (GDDS) in support of China’s statistical development; and (4) discuss TA and training priorities for the next two years.

The mission held meetings with senior officials and technical counterparts of TA and training recipient agencies in Beijing, including the People’s Bank of China (PBC), the China Banking Regulatory Commission (CBRC), the National Bureau of Statistics (NBS), the Ministry of Finance (MOF), the State Administration of Foreign Exchange (SAFE), and with the Director and other senior officials from the Joint China-IMF Training Program in Dalian (CTP). The mission, with the assistance of the Resident Representative’s Office, also consulted with users to exchange views on China’s macroeconomic statistics.

Based on discussions that emerged from these meetings, and on the questionnaires completed by the agencies, the mission concluded that STA’s TA and training missions to China were highly appreciated by all agencies; they ranked the overall usefulness of STA’s TA and training as very useful (four agencies) and mostly useful (one agency). In particular, all agencies ranked training/workshops as the most effective delivery mode in meeting their needs.

The main factors contributing to the success of the TA and training programs are (1) the strong commitment of the high-level leadership of the TA-recipient agencies to statistical development and statistical capacity building; (2) adequate resources allocated to the TA program by STA and the authorities; (3) high professionalism and expertise of TA providers; and (4) effective communication and cooperation between STA and the TA recipient agencies.

The mission recognized that although substantial progress has been achieved by the authorities in all areas of statistics, the substantial agenda of work still remains, and the substantial commitment of resources to the TA program is needed. To sustain the momentum, the authorities need to address the risks to the TA program as identified by the mission.

Going forward, the mission discussed with the Chinese agencies about how STA’s future TA and training program could assist China to further enhance its statistical capacity. The mission saw the needs to (1) shift the focus of STA’s involvement with China from traditional TA to technical cooperation and consultation, with the authorities playing a more prominent and contributing role in TA request, design, delivery, implementation, and evaluation; (2) expand the forms of TA delivery to meet the needs of the authorities; (3) look closely at concerns expressed by the users and develop a plan to address these; and (4) develop a coordinated long-term statistical strategy for all agencies to identify areas of priorities for TA using the GDDS as a framework, and consider subscribing to the Special Data Dissemination Standard (SDDS) at an early date.

In the short term, the broad balance of TA and training missions should remain; STA should continue to provide more focused and coordinated TA, including more short-term TA missions aimed at problem solving in specific areas of statistics and more tailored training. It is also recommended that several issues identified by the mission as noted at the end of this report be addressed by the relevant Chinese agencies in the coming months.

I. Introduction

A. Background

1. The mission of the IMF’s Statistics Department (STA) to evaluate the technical assistance and training to China was conducted in line with recommendations of the 2005 report of the IMF’s Independent Evaluation Office,3 which called for more systematic approaches to assess progress on major TA activities and to identify factors contributing to success and/or shortfalls of TA delivery and implementation. The evaluation provides an opportunity for both TA providers and recipients to draw lessons that can inform efforts to enhance the effectiveness of TA programs, thus providing guidance for future TA cooperation. Much of the interaction between STA and China has been through training rather than traditional TA, at the request of the Chinese authorities, primarily so that larger number of officials can benefit from their interactions with IMF staff. This evaluation therefore covers training as well as TA, and references throughout this report—except where noted—include training when discussing TA.

2. STA has delivered a substantial amount of TA to China since it rejoined the IMF in April 1980 to support its efforts in the reforms of its statistical system and to help the Chinese agencies produce data using internationally accepted methodologies and practices, both for the authorities’ use and for the IMF’s operational purposes. The largest share of this TA was on the monetary side, with the People’s Bank of China (PBC) as principal counterparty, but other topical areas and counterpart agencies were also covered.

STA Capacity Building: TA and Training Activities (FY 1995–2009)

(in mission count)

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Note: Mission count benefitting China, APD region, and LIC countries. Source: TIMSRP16

3. Over the years STA’s TA to China has played an important role in the development of China’s statistical system. One significant positive outcome is China’s participation in the IMF’s General Data Dissemination System (GDDS) as from April 2002, which set the stage for a new level of technical cooperation between STA and China within the GDDS framework. The current evaluation focuses primarily on TA delivered during the period since 2002, in part to assess progress made in China’s statistical development under the GDDS plans for improvement.

B. Process and Modalities for the Evaluation

4. In conducting the evaluation, the mission worked closely with officials and technical counterparts in each of the areas of macroeconomic statistics. Prior to the visit, the mission (1) met with the Chinese authorities during the 2008 Bank/Fund Annual Meetings to discuss the objectives of the evaluation and to seek their views and support to the evaluation; (2) reviewed the amount, form, and topics of TA and training provided by STA and used the available TA documents; (3) coordinated with STA TA providers, the regional manager and the country coordinator, and solicited views of the Asia and Pacific Department (APD); and (4) sent to each of the TA recipient agencies a questionnaire on the usefulness of, and main lessons learned from, STA’s TA.

5. During the course of its visit, the mission (1) held evaluation meetings with senior officials and technical counterparts of all TA recipient agencies to elicit their views on the effectiveness of STA’s TA, and to discuss the status of implementation of major recommendations made by STA as well as the modes of TA delivery the authorities consider most appropriate;4 (2) reviewed the questionnaires completed by the agencies; (3) met with users to exchange views on China’s macroeconomic statistics; and (4) held a seminar on the last day of the mission to present the mission’s findings to representatives from the agencies.

6. The report is structured as follows. Section II contains a brief overview of STA’s TA program to China. Section III reviews STA’s TA by each of the TA-recipient agencies. Section IV documents findings on positive factors and risks to the TA program. Section V presents the conclusion of the evaluation and recommendations. A number of appendices complete the report.

7. The mission would like to express its appreciation to the Chinese authorities for the excellent hospitality, cooperation, and assistance extended to the mission. The cooperation and dedication of the mission’s counterparts greatly facilitated the mission’s work.

II. Brief Overview of STA’s TA Program to China

8. STA’s TA to China covers all areas of macroeconomic statistics, comprising monetary and financial statistics, financial soundness indicators (FSIs), government finance statistics (GFS), balance of payments statistics (BOP), and real sector statistics. In conducting this TA, STA has worked closely with the People’s Bank of China (PBC), the China Banking Regulatory Commission (CBRC), the Ministry of Finance (MOF), the State Administration of Foreign Exchange (SAFE), and the National Bureau of Statistics (NBS). At present STA is the major provider of TA in macroeconomic statistics to China, although the OECD provides exchanges on national accounts and there is limited bilateral assistance to the NBS.

9. Since China began participation in the GDDS in 2002, TA to China has taken a variety of forms, including: (1) hands-on, issue-oriented short-term missions designed to address specific areas of weakness in statistics; (2) short seminars for high-level officials on the use of macroeconomic statistics for purposes of analysis and policy formulation based on internationally accepted methodologies; (3) tailored training combined with on-the-job training relating to specific practical topics; (4) participation in general training activities in Washington DC, at the Joint China-IMF Training Program in Dalian (CTP), the Joint Vienna Institute (JVI), and the IMF–Singapore Regional Training Institute (STI); and (5) training courses/study visits to IMF headquarters on methodology and compilation procedures for Chinese officials.

10. The choices of topic for TA and training derive from the Chinese authorities. The authorities contact STA directly, or express their requests through APD or the IMF Institute, either through meetings at the Annual and Spring Meetings, through visits of IMF missions to China, through the Office of the IMF Executive Director for China, or by mail. The agencies indicated that they were pleased overall with STA’s responses to their requests.

11. Training has been the dominant form of STA’s TA program to China (see Appendix II) and was viewed by all the agencies as the most effective delivery mode in meeting their needs. During the period of 2003–2008, more than 500 participants from China attended training courses offered by STA at IMF headquarters, the CTP, the JVI, and the STI. A total of 13 training courses were delivered in China covering all areas of macroeconomic statistics.

12. Since the establishment of the CTP in 2004, STA has conducted nine training courses at the CTP, making it the second largest training providing department following the IMF Institute. STA’s courses are normally attended by a wide group of staff, usually mixture of staff from headquarters and those from provinces, as well as data suppliers. The CTP administers a formal evaluation at the end of each course. These evaluations consistently underscore the efficacy and value of training offered by STA. Participants expressed a high level of satisfaction with the content of the courses, the teaching techniques employed, and the methods of delivery.

13. Ownership of TA and training by the Chinese authorities was strong. The authorities were very much aware of the deficiencies in their statistical systems and the IMF was flexible to meet their requests along the lines most useful to them. Without such strong ownership, the TA would not have been as successful.

III. TA Evaluation by Each Recipient Agency and by Users

14. The mission held evaluation meetings with senior officials and technical counterparts of all TA-recipient agencies, including the PBC, the CBRC, the NBS, the MOF, and the SAFE. The following section documents the main discussions with these agencies. The mission also reviewed the completed questionnaires by these agencies which are included in Appendix III.

A. The People’s Bank of China

15. The PBC is responsible for compiling China’s monetary and financial statistics, and together with the CBRC, Financial Soundness Indicators. The PBC reports monetary data on a timely and regular basis to STA for publication in the International Financial Statistics (IFS), covering data on monetary authorities and banking institutions as well as interest rates and share prices. China participated in the coordinated compilation exercise (CCE) for FSIs conducted by the IMF. FSI data and metadata compiled for the CCE have been submitted to STA. However, at the request of the authorities, this information is not posted on IMF’s website along with that of other CCE countries.

TA delivery and outcome

16. During the period 2003–2008 STA delivered two TA missions and conducted five training seminars in China for officials from the PBC, the CBRC, SAFE, NBS, China Insurance Regulatory Commission, China Securities Regulatory Commission, as well as staff from major commercial banks that are involved in data reporting and compilation for monetary and financial statistics.

Monetary statistics:
TA missions

17. The 2005 mission assisted the authorities in addressing methodological issues arising from the recent developments in the financial sector that have important implications on monetary statistics. These include newly adopted instruments, newly established financial institutions, and the restructuring of the banking sector. Following the mission, the authorities began reporting monetary data with improved classification of instruments and economic sectors.

18. The 2007 mission worked on addressing methodological issues arising from further developments in the financial sector and also focused on the implementation of standardized reporting forms (SRFs). Following the mission, the authorities were in a better position to compile and report monetary data in SRFs to STA.

Training courses

19. The three training courses (2003, 2005, 2007) held in CTP were well received by the authorities. The participants in general found the courses beneficial to their work. To take full advantage of the courses, the size of the classes has been considerably increased to accommodate participants from central bank headquarters (the data compilers), commercial banks (source data providers), and other data-compiling agencies (for balance of payments, real sector, government finance). Such a mix of background of participants benefited the workshops and discussions of methodology during the course.

Financial Soundness Indicators:

20 The training courses on FSIs (2005, 2008) held in CTP were combined with TA consultation to assist the authorities in completing FSI metadata for the CCE. These were held in response to the request of the authorities and were well received.

21. In addition, a relatively new format of TA has been increasingly used for providing TA in FSIs to China—staff visit of Chinese officials to IMF headquarters for training and technical consultation. These visits were funded by the authorities. Two of these (in October 2006 and December 2007) were particularly effective. Following the first visit in 2006, the authorities submitted the first draft FSI metadata for the CCE, and following the second visit the authorities submitted the final FSI data and metadata for the CCE.

TA needs for the period ahead

22 While STA’s TA helped the PBC make substantial progress in monetary and financial statistics and financial stability indicators, there are still many challenges and gaps in meeting international standards and domestic needs. The PBC has requested further assistance in the following areas:

  • Traditional training in monetary and financial statistics.

  • TA to resolve specific issues including (1) estimates of the size and key characteristics of special purpose vehicles; (2) measurement of the overall size and key segments of securities markets; (3) measurement of the size and characteristics of derivatives; (4) measurement of the size and characteristics of instruments newly introduced in China, such as banker’s acceptances; (5) harmonization between supervisory data and data collected for statistical purposes; and (6) stress tests using FSIs.

  • Expansion of TA delivery forms to (1) help the PBC establish contacts with other central banks and international organizations to exchange experiences; (2) provide opportunities for PBC staff to work in STA for some months to obtain experience in methodological work and learn about integrated correspondent system and the SRF, and (3) co-organize with the PBC international conferences/seminars on important topics in financial statistics, give presentations, and identify participants from other countries and/or organizations.

B. The China Banking Regulatory Commission

23 The CBRC is responsible for compiling China’s FSIs in cooperation with the PBC.

TA delivery and outcome

24 The CBRC received STA’s TA through participation in the training courses organized by the PBC. Since 2005 13 staff from the CBRC participated in the training program on the CCE for FSIs at CTP in Dalian; three staff participated in the training program on the CCE for FSIs at IMF headquarters in 2007.

25 The participants found that these training programs were very useful and helped them build up a solid foundation for their compilation work. They noted that they not only learned the technical methods on how to compile FSIs, but also how to analyze these data, thus helping them further ensure the effectiveness of their regulatory services. They also appreciated the professionalism and the dedication of the lecturers.

TA needs for the period ahead

26 The CBRC would like to expand its cooperation with STA, in particular to (1) establish direct contact with STA to exchange information; and (2) receive direct TA on the compilation of FSIs, revision of the metadata on FSIs, and on the analysis and the use of these data.

C. The National Bureau of Statistics

27 The NBS is responsible for compiling China’s real sector statistics, and is the lead agency in coordinating GDDS initiatives in China.

TA-related activities

TA delivery and outcome

28 During 2003–2008, STA conducted the following main activities in cooperation with the NBS: a TA mission on GDDS in 2003; co-hosting an international meeting on technical cooperation in statistics in 2004; training seminars on the quarterly national accounts in 2004 and on the use of macroeconomic statistics in 2005. STA also hosted visits by several NBS delegations to IMF headquarters, to discuss issues relating to the GDDS and data dissemination and exchanges.

29. To evaluate STA’s TA program, the NBS organized a meeting attended by former participants of STA’s training courses. The summary of the discussion was presented to the mission at the evaluation meeting. In general, the NBS found STA’s GDDS mission was most effective in helping China implement GDDS recommendations and update GDDS metadata. Various training opportunities offered to NBS staff were very useful and contributed to the capacity building in the NBS. The following specific suggestions were made to further enhance STA’s TA program: (1) increase training opportunities to NBS staff through more channels; (2) enhance the effectiveness of training courses by collecting questions from participants prior to the start of the training courses and retaining communication between participants and lecturers after the course; (3) organize special courses for transitional economies that may face similar issues to exchange experience; (4) provide some platforms to have dialogues with advanced countries; (5) organize training courses in China that focus on specific subjects and issues; and (6) provide internships for NBS statisticians to work at the IMF to get some hands-on training and experience.

TA needs for the period ahead

30. The NBS has identified the following activities that would require STA’s assistance: (1) training in price statistics, including service sector prices, such as real estate and transportation. The training could be conducted through (a) a tailored training course in China to resolve specific issues, and (b) hands-on training of NBS statisticians in advanced countries; (2) training in national accounts: this training could be conducted through (a) a training course on national accounts based on the System of National Accounts 2008, and (b) a tailored seminar and a TA mission on specific topics with some case studies, such as GDP accounting, research on supply and use methodology, and regional GDP accounting. While STA would endeavor to respond positively to these needs, they should best be planned as part of an overall strategy, and in conjunction with other donors as available.

GDDS initiatives in China
Progress since 2002

31. One of the positive outcomes of STA’s TA program has been China’s participation in the GDDS, which has marked a major step forward in the development of China’s statistical system and has produced profound positive impacts both within and outside China. Since 2002 the GDDS has provided a framework to further develop China’s statistical systems and helped identify TA needs and coordination with TA providers.

32. During the past six years, the Chinese agencies have made considerable progress in improving the production and dissemination of macroeconomic data, most notably in the following areas: (1) introduction of more features of internationally agreed methodologies and datasets (e.g., more use of survey techniques; inclusion of extra budgetary items in budgetary data; expanding the coverage of financial institutions, adjusting the classification of financial corporations, improving the “all accounts” reporting system in monetary statistics; reform of GDP revision and release methods; and release of China’s IIP); (2) improvement in data dissemination following the GDDS recommendations, such as disseminating advance release calendars on several agencies’ websites; (3) wider dissemination of statistical products, including through websites; and (4) faster and more frequent release of several sets of data.

33. The GDDS has also been a stimulus for enhanced coordination and collaboration among the Chinese agencies that produce and disseminate statistics. The designation of a Deputy Commissioner of the NBS as China’s overall GDDS coordinator has ensured strengthened coordination and collaboration at the senior level. The establishment of a GDDS office within the NBS has helped coordinate the work on the GDDS with all the agencies involved and with the IMF. The GDDS office also has the responsibility, among others, to organize the annual update of the GDDS metadata and prepare the annual GDDS development report for China.

Challenges and TA needs

34. The NBS officials noted that despite achievements made in the past years, China still faces considerable challenges. Compared with the current GDDS recommendations and the specifications of the SDDS, China needs to close the major gaps in the following areas: (1) compilation of discreet quarterly GDP; (2) publication of the data template on international reserves and foreign currency liquidity; (3) dissemination of government finance and debt data by currency, maturity, and debt holders; (4) compilation and dissemination of quarterly BOP data; (5) improvement of the economic classification system following the international standards; and (6) the setting up a national summary data page. Additionally, the lack of time series for CPI, the PPI, and the production index is of concern, and could be addressed as further priorities.

35. It was also noted that, in the past two years, the usefulness of the GDDS metadata was hampered by the long lags in posting GDDS updates and by limited public awareness of the GDDS. Continued efforts are needed to ensure the currentness of GDDS metadata for China posted on the IMF’s Dissemination Standards Bulletin Board and on several Chinese agencies’ websites. The annual GDDS update has provided a mechanism for updating statistical practices, reviewing progress made during the year, and for setting out plans for statistical improvements and identifying needs for TA and training.

36. It is very important to conduct the annual update of the GDDS metadata, including the update of the contact persons for each agency. When updating the GDDS metadata, it is also useful to review the other methodological notes that agencies disseminate in order to achieve consistency. The updated GDDS metadata should be announced on the agency’s website as well in other relevant publications to alert users. It is also important to increase users’ awareness of the GDDS metadata and make greater use of the metadata. China’s metadata have provided the most comprehensive description of China’s current statistical production and dissemination practices for macroeconomic and socio-demographic data, as well as plans for improvements and TA needs both in Chinese and English. The detailed metadata also provide users with information necessary to assess effectively the usefulness of the data for their own particular purpose. The usefulness of the GDDS metadata could be further enhanced by their wide and timely dissemination through various channels.

37. Going forward, the GDDS can be used as a stepping stone towards the SDDS as China makes progress to meet the requirements of this higher standard. The NBS has indicated that it will include the subscription to the SDDS in its statistical development plan for the next eight years. It also indicated that it would need training in techniques of data dissemination. STA would be more than happy to provide training and assistance in these areas, and continues to stress that China should aim to subscribe to the SDDS well within the eight-year timeframe. At this point China is one of only two non-SDDS subscribers in the G-20, but could be well placed to move into the G-20 mainstream by achieving rapid SDDS subscription.

D. The Ministry of Finance

38. The MOF is responsible for compiling China’s government finance statistics (GFS). It reports annual data covering, primarily, the budgetary central government and local government sectors, compiled on a cash basis.

TA delivery and outcome

39. STA conducted one TA mission in 2005 and two GFS courses for MOF staff in China in 2003 and 2008, respectively. The 2005 mission helped familiarize MOF officials with the GFS methodology and constructed a bridge table to convert MOF data to GFS tables. The two courses provided GFS training to MOF officials representing the central administration in Beijing as well as each of the provincial and major municipal offices.

40. The MOF officials indicated that STA’s TA program contributed to the development of China’s GFS. In particular, the training helped MOF officials understand the GFS methodology, improve data quality and facilitate international comparison of fiscal data, thus helping them achieve the goal of more closely aligning China’s fiscal data with international standards. They indicated that the 2008 course helped them address several outstanding data classification and compilation issues. As a result, there were improvements in the annual data reported to STA for publication in the 2008 GFS Yearbook. STA’s TA also helped MOF officials understand the international practice of classification of government expenses, thus helping them establish and improve the classification system in China. With the assistance of the IMF, MOF implemented a new classification system of government revenues and expenditures in 2007 and increased transparency and dissemination of fiscal data.

TA needs for the period ahead

41. The MOF’s TA needs cover the following three areas: (1) TA in GFS and debt statistics to help MOF officials further improve the GFS and debt management systems to meet the public’s needs for fiscal data and the government’s needs for macroeconomic analysis; (2) TA in enhancing the management of government fiscal data, including providing information on working processes, management methods, and experience of developed or developing countries in fiscal data production and publication; and (3) TA in the government accrual-based accounting management system. With the implementation of the new GFS classification system, the MOF needs to set up a new government fiscal reporting system. TA can help MOF officials study the feasibility of introducing an accrual-based accounting system in China and understand the practices and experience of other countries.

42 An early priority could be training on introducing the GFS Manual 2001 and the practice and successful experience of other countries. In line with the request of the MOF, STA could also provide a list of experts in fiscal data management and help establish contacts with other countries to exchange information and share experience.

E. The State Administration of Foreign Exchange

43 SAFE is responsible for compiling China’s external sector statistics. Balance of payments and international investment position (IIP) data compiled largely in accordance with the fifth edition of the Balance of Payments Manual (BPM5) are reported to STA annually.

TA delivery and outcome

STA has provided extensive TA for China to improve BOP and IIP statistics.

  • In April 2005, an IIP TA mission conducted a seminar on the importance and usefulness of the IIP, and met with compilers to provide detailed technical advice on specific issues related to the compilation of China’s IIP. Further, TA was provided by STA directly from headquarters and in May 2006 China published its first IIP statement, a key development in China’s external sector statistics.

  • In August 2005, STA conducted a course on external debt statistics. There was active participation by SAFE officials; the seminar facilitated the compilation of external debt data for the IIP.

  • In June 2006, at the request of the authorities, STA conducted a specialized seminar on Cross-border Stocks and Flows. This seminar was aimed at strengthening BOP and IIP data, particularly for the banking sector. Experience of other countries’ compilation practices and statistical legal structures was also provided by the lecturers.

  • In June 2007, STA conducted a Balance of Payments and IIP course.

  • In April 2008, STA conducted a one-week seminar on the draft Balance of Payments Manual, six Edition (BPM6).

44 Overall, SAFE officials highly appreciated STA’s TA and noted that it contributed significantly to the development of China’s external sector statistics. In particular, SAFE officials considered STA’s training activities very effective in the following aspects: (1) the lecturers from STA are very knowledgeable and professional; (2) the large number of staff able to participate, representing officials from headquarters, local branches, and data suppliers from other government agencies, met SAFE’s training needs; (3) the contents of the courses are very comprehensive; (4) the teaching methods are very helpful; and (5) the length of the seminar/course is appropriate; i.e., one week for a special topic seminar and two weeks for a traditional training course.

TA needs for the period ahead

45 At present the SAFE is working on several projects to further improve its balance of payments statistics, which include the release of quarterly BOP, the revision of BOP reporting regulations, and the enhancement of reporting arrangements through the internet. STA’s assistance is requested in these areas.

46 SAFE officials suggested that STA cooperate with the SAFE in a number of areas, including: (1) conduct a traditional large-scale training course on the major changes in BPM6; (2) host in China an international seminar regarding the survey of transportation, insurance, and tourist items, with a view to helping China establish and improve the sample survey system for collecting information on transportation, insurance, and tourist services; (3) provide TA on collecting financial data, including financial derivatives from the financial sector; (4) conduct a seminar on the use and analysis of macroeconomic statistics and on monitoring capital inflows and outflows; and (5) provide TA on including external debt denominated in Chinese Yuan in the external debt statistics.

47 On the forms of TA, SAFE officials suggested that in addition to the existing TA and joint training programs STA expand its forms of TA. In particular SAFE suggested that STA: (1) arrange for staff members from SAFE to work in STA for a short period;

(2) use its international status and contacts to help SAFE establish contacts and communications with government agencies of other countries and with other international organizations, including to carry out short-term staff exchanges; (3) help arrange study tours to countries with relevant experience and expertise; and (4) assist SAFE to host joint seminars with statistical experts of other countries. In this regard, China indicated its willingness to host the 2009 BOP Committee Meeting.

F. Views from Users

48 The mission met with a group of users from academia, media, international organizations, and financial sector analysts to exchange views on China’s macroeconomic statistics. The users noted that China’s statistics have improved over the years, and meet their basic needs for data. However they observed that the following factors hamper the usefulness of the data: (1) limited focus on usability and accessibility of data by statistical agencies; (2) a lack of credibility of statistics due to the absence of any explanation of apparent inconsistencies in certain data sets; (3) a lack of explanatory notes accompanying the released data and revised data; (4) a lack of contact information on agencies’ websites for responding to users’ questions; (5) long lags in releasing certain sets of data; and (6) the low frequency for certain sets of data, such as national accounts and BOP. The mission urges the Chinese agencies to put priority in addressing these issues. Indeed, they could usefully be included as specific elements of the agencies’ development plans. They relate closely to central elements in STA’s Data Quality Assessment Framework, and the mission considers that addressing them forcefully would be well within the capacity of the Chinese agencies and could lead to significant enhancement in the standing of the agencies among the public.

IV. Common Findings: Positive Factors and Risks to the TA Program

49 Based on discussions in the meetings with all five TA-recipient agencies, and on the questionnaires completed by these agencies, the mission found that STA’s TA program to China was highly appreciated by all agencies; they ranked the overall usefulness of STA’s TA as very useful (four agencies) and mostly useful (one agency). All agencies ranked training/workshops as the most effective delivery mode in meeting their needs.

50 It is the mission’s view that a number of factors contribute to the success of STA’s TA program. These include: (1) the strong commitment of the high-level leadership of the TA-recipient agencies to statistical development and statistical capacity building; (2) adequate resources allocated to the TA program by STA and the authorities; (3) the high professionalism and expertise of TA providers; and (4) effective communication and cooperation between STA and the TA-recipient agencies.

51 The mission also identified a number of risk factors that have hampered and could hamper the effectiveness of the TA program.

  • Training related issues: (1) rapid turnover amongst training recipients; (2) expertise spread too thinly, i.e., training needs to reach more people, especially outside the head office in Beijing; (3) lack of availability of assistance outside IMF’s core areas; (4) the IMF’s new charging regime, which may lead to a fall-off in demand for TA including training, in particular for the NBS which may be more constrained in its activities than are the other agencies; (5) the cost of operating the CTP at Dalian, especially as regards training involving the NBS; and (6) language and associated interpretation difficulties.

  • Institutional issues: (1) the decentralized nature of responsibility for statistics, with limited coordination, in particular with the provinces; the mixed incentives in the production of statistics in the provinces; (2) the legacy of past laws, e.g., components of certain indexes not disclosed—which do not reflect the paradigm towards transparency; (3) the lack of resources to implement statistical improvements; and (4) the ad hoc approach to statistical development with a limited use of the GDDS as a framework.

  • Data quality issues: (1) limited focus on the usability and accessibility of data; (2) a lack of credibility of statistics due to the lack of explanation for apparent inconsistencies in certain data sets; and (3) the delay in posting of GDDS metadata.

V. Conclusions and Recommendations

52. Given the findings of the missions and the comments received from all TA-recipient agencies and users, the conclusions and recommendations that can be drawn from the evaluation are:

  • Overall, substantial progress has been achieved by the authorities in all areas of macroeconomic statistics in recent years and STA’s TA program has contributed significantly to this progress. However, much remains to be done to address the data weaknesses, which still hamper economic analysis, policy formulation, and monitoring. Users comment on issues of accessibility and consistency, as well as long lags on some data series. The importance of China for the world economy and its receptiveness to STA’s TA program indicate that TA for China should remain a priority and that a substantial commitment of resources is needed both from STA and from the authorities.

  • The focus of STA’s involvement with China should be shifted from traditional TA to technical cooperation and consultation, with the authorities increasingly involved in TA design, delivery, implementation, and evaluation. Such an approach also recognizes China’s capacity and willingness to contribute to STA’s overall TA programs with its member countries. Throughout the region and more widely the authorities’ decision to host the 2009 meeting of the IMF’s Balance of Payments Committee is a good example of technical cooperation between STA and China.

  • STA’s TA delivery modalities could be expanded to meet the needs of the authorities and to reflect STA’s unique role in formulating statistical methodologies and standards, in fostering the dissemination of data, and in having contacts and information exchanges with all member countries. The following forms of assistance may be of interest for the Chinese agencies: (1) sending staff members to work in STA for a short period; (2) establishing contacts and communications with government agencies of other countries and with other international organizations to carry out information and short-term staff exchanges; (3) arranging study tours to countries with relevant experience and expertise; and (4) hosting joint seminars with statistical experts of other countries and international organizations.

  • Rapid turnover of staff has been raised by recipient institutions as a justification for more TA. The various agencies should develop strategies to build up capacity, including retraining sufficient staff in key functions so that expertise can be retained and effectively passed on.

  • Going forward, a coordinated long-term statistical strategy for all agencies is needed to identify areas of priorities for TA. The authorities should continue to use the GDDS as a framework for statistical development, while at the same time considering planning to subscribe to the SDDS. The recently-approved enhancement of the GDDS, which complements the traditional focus on metadata with a new emphasis on data dissemination, will be helpful in this regard. Graduating to the SDDS at an early date would be a natural follow-up to the GDDS work and would be commensurate with China’s role in the world economy (at present China is one of the only two G-20 countries that have not yet subscribed to the SDDS). The SDDS provides an overall framework to establish best statistical practices for timeliness, frequency, coverage, with focus on dissemination. Subscription would also aid policymakers, since better and more transparent statistics improve policymaking and increase the credibility of policies. Similarly, the authorities could consider requesting STA’s assistance in preparing a data module on the Report on the Observance of Standards and Codes, which would provide a full diagnostic of the state of statistics, hence providing a framework for statistical development and TA.

  • The new IMF TA charging regime, due to take effect in January 2010, could raise issues for some of the recipient agencies, in particular the NBS. It would be worth examining the modalities of the new regime in advance, so that issues (for instance budgetary or procurement) can be resolved in a timely manner, and the Fund is able to continue to provide the needed TA and training to all the recipient agencies.

  • For the short term, the broad balance of TA and training missions should remain, given that STA’s TA program is much appreciated and identifiable benefits have been achieved. Nonetheless, in line with suggestions from the Chinese agencies, training activities can be refined by (1) giving increased focus to specialized topics, with fewer courses on longer and broad general methodology; (2) establishing contacts between lecturers and participants before training to help identify particular issues of interest; (3) keeping a sufficient part of the schedule of the training courses for interactions and addressing special topics; (4) retaining communication between participants and lecturers after the course; (5) training the Chinese agencies’ trainers, and having more integration of STA’s training with in-house training by the Chinese agencies, so that the basic training can increasingly be conducted internally; and (6) developing more explicit monitorable outcomes for TA and training activities, and analyzing the results.

  • Several issues identified by the mission could be addressed by the agencies in the coming months: (1) clarify the priority areas; these may include (a) broadening monetary statistics to include new instruments and institutions, e.g., derivatives, special purpose vehicles, which would be important for addressing issues in the present financial turmoil; (b) discrete quarterly constant price GDP on the expenditure side; (c) quarterly balance of payments; and (d) including general government and classification of expenditures in assessments of China’s stimulus package, and improving the timeliness of government finance statistics; (2) responding and paying increased attention to the needs of users, who are looking for time series, consistency, timeliness, and explanations of differences as noted in the report; (3) developing and explaining revisions policy—critical in order to improve timeliness and enhance credibility; (4) increasing the use of websites and hyperlinks to disseminate statistics and keeping the GDDS metadata current; (5) continuing efforts in participating in major statistical initiatives, e.g. the coordinated direct investment survey and the CCE for FSIs; and (6) developing a strategy to handle the IMF’s proposed new charging regime.