Overview of Technical cooperation between the

Federal Statistical Office of Germany and the

National Bureau of Statistics of China

- A Model for a Successful Partnership -

Mr. Johann Hahlen

President

Federal Statistical Office of Germany

Beijing, May 11, 2004

Address of welcome

I have the great pleasure and honour to give you an overview of the cooperation activities between German and Chinese official statisticians. For many years, the National Bureau of Statistics of the PR of China has been one of the most important foreign partner organisations of the Federal Statistical Office. In the nearly 20 years of our cooperation, we have succeeded in developing a close partnership relation, which is based upon mutual trust. We have developed certain approaches to joint project planning, to the mutual exchange of information and experi-ence, which in our conviction contribute essentially to the success of our cooperation projects. In that sense, German-Chinese statistics cooperation can by all means be seen as a pattern of bilateral partnership between two Statistical Offices. For that reason I really wish that my statements on German-Chinese cooperation would serve as such a pattern even to other Statistical Offices, helping them to find their own approaches to successful partnership.

German-Chinese partnership in statistics is embedded in the close economic and good political relations between the two countries. Some remarks will illustrate that:

1.  Business and trade relations

Business and trade relations between the Federal Republic of Germany and the PR of China have developed at a breathtaking speed, ever since the two countries established diplomatic relations in 1972. The trade between Germany and China is actually booming:

By now, the PR of China has become the most important export market for German products in Asia. At the same time, the Federal Republic of Germany is by far the largest European trade partner of the PR of China and over the last few years it has also been China's largest European investor.

The Federal Republic of Germany ranks sixth among all other trade partners of the PR of China. In its turn, the PR of China is the most important Asian trade partner of the Federal Republic of Germany and meanwhile it ranks tenth among all other trade partners.

In 1972, German exports of goods into the PR of China amounted to merely 272 million Euros, in 2003 they had increased to 18.2 billion Euros, that means, circa 67 times as much as before.

In 2003, German exports into the PR of China increased by 24.9 % as compared with 2002. Thus, as far as ex-ports are concerned, the PR of China climbed from rank 12 to rank 10 in the ranking list of all German trade part-ners, whereas Japan, Germany's second important trade partner in the Far East, fell back from rank 14 to rank 16 concerning exports.

Imports of goods from the PR of China into the Federal Republic of Germany have made a similarly positive evo-lution: Chinese goods are conquering the German market. In 1972, the invoiced value of goods delivered into the Federal Republic of Germany was 175 million Euros. In 2003, this figure amounted to 25 billion EUR.

A 17.3 % rise was achieved on the previous year. That means that China ranks seventh, as it did in 2002, whilst Japan holds rank nine.

With these growth rates, the PR of Chinas has been able to increase its percentage share in Germany's external trade in both directions of delivery, whereas the share of Japan grew smaller. In 2003 as compared with 2002, the share of EU countries in Germany's external trade slightly increased regarding exports, whereas it almost stag-nated regarding imports.

Science relations between Germany and the PR of China have also developed in a gratifying way:

Whereas just 666 students had come from the PR of China to Germany in order to study at a German university in the winter semester in 1982/1983, the number of students increased to as many as 20,141 in the winter se-mester in 2002/2003. Thus, Chinese students represent the most numerous proportion among foreign students that come to Germany for the purpose of study.

Favoured studies included natural and engineering sciences as well as law, economic and social sciences.

These figures of official statistics on both countries show clearly that official statistics play an important role when it comes to portraying the relations between two countries. From this fact we can derive the general conclusion that the statistics cooperation between two countries has the best chance to find wide support and approval, if the two governments have set the corresponding priorities for their collaboration in foreign, economic and develop-ment politics.

2.  The German-Chinese cooperation programme

It was and it is a real challenge for German statistics to support big and fascinating China with its more than four thousand year old history and culture and to accompany it on the road to reforming its statistical system.

Many factors contributed to the success of this cooperation. I should like to mention some of them: First of all - surprisingly to many - the statistical systems of the two countries have important features in common. Thus, the two national statistical offices have similar functions in terms of concepts, methodology and coordination. For both in Germany and in China great importance is attached to the regional aspect (provincial offices in China / statisti-cal offices of the federal states in Germany). Besides, the two statistical systems had to manage a reform process of statistics towards market economic requirements. In the course of reunification, the German statistics system went through a transformation process in the new federal states, which in some way can be paralleled with the developments in China.

On that background, more than 10 years ago in November 1993, at the initiative of the Chinese partner office our two institutions concluded a bilateral cooperation agreement to ensure a continued and enduring cooperation in the statistical field. Since that time an active exchange of experts has taken place.

And that takes me to the third and probably decisive factor for this success: the people involved, i.e. the statisti-cians, our colleagues from the Chinese Statistics Offices as well as the statisticians from the Federal Statistical Office and the Statistical Offices of the Federal States, who were able to establish an outstandingly good, loyal and even friendly cooperation. With an extreme input of work, deploying intellectual curiosity and frankness, our colleagues have overcome cultural and linguistic obstacles and successfully managed consulting and training.

Before we started the cooperation project, we made German statisticians familiar with the most important aspects of Chinese culture and with intercultural communication between German and Chinese people. I have been told that the same was done on the Chinese side. It is my opinion that the mutual respect of the partner country's culture and the related appreciation or at least tolerance towards the partner country's typical way of behaving are indeed essential conditions for partnerships to be successful. Without such mutual comprehension we can hardly expect the technical efforts to be an enduring success. In the meantime, the many years of cooperation between German and Chinese official statisticians have turned their relations into a real form of trusting partnership. Many personal friendships have even emerged in the context of the numerous cooperation activities. In that, I see a very good basis for a continued and successful cooperation in statistics.

Over the last 10 years, we have had five visits on chief statisticians level. I was very impressed by my visit to the PR of China in October 1998. With great pleasure I remember your visit, dear Commissioner Li, in August 2003 on the occasion of the ISI session in Berlin.

All in all, a total of 55 actions were held in the framework of this bilateral cooperation, including 30 visits of 163 Chinese statisticians to the Federal Republic of Germany, 17 missions of experts from the Federal Statistical Office and the statistics offices of the federal states to the PR of China as well as four translations of elementary statistical publications and methodological materials into Chinese. The subjects that were dealt with covered the entire field of German and Chinese official statistics. Taking up a suggestion of our Chinese partner, we began recently to also finance coherent minor projects, in addition to the individually specified conventional activities. It has been clear since the very first project on the building of an international data centre (Project on International Statistics) that both parties can learn from each other: the Chinese party has learned how the supply of data is customised according to the needs of the various user groups and how international data sources can be made accessible systematically; the German party has learned how the Yearbook of International Statistics can effec-tively be made available to an international group of users.

3.  The large project on the building of industrial and road traffic statistics

From 1996 to 2002, in addition to the bilateral cooperation programme a large project, which was funded by the two governments, was devoted to the building of Chinese industrial and road traffic statistics. Independent experts, acting on behalf of the German Society for Technical Cooperation, the organisation responsible for the German share in the funding, as well as the IMF came to the same conclusion, certifying that the project had been very successful. As was already mentioned, the essential basis of that success had been laid in the many years of bi-lateral cooperation programmes. Factors that ensured the success of the project included the strict target orienta-tion of the project, the current evaluation of all particular activities in the sense of project monitoring and the techni-cal expertise and high motivation of experts and project managers on both sides. That is why, from my point of view, this project has the character of a model or pattern not only for the Federal Statistical Office, but also for other large international projects.

I am not going to dwell on the details of the technical objectives and results of the project, which will be the subject of tomorrow's talks. Rather, I should like to examine the question on how a large project of that kind can make a sustainable and trailblazing contribution to institutionalised cooperation between two statistical offices.

The project was directly related to the PR of China's economic opening and the restructuring of the Chinese eco-nomic system. Since the beginning of the 1990s, the trend of development has been towards a fundamental reform of the statistical system to adapt it to the new political and economic situation. In its project application, the Chi-nese government had stressed the great importance attached to it and explicitly referred to its policy of economic reforms and its opening to the world market. The German side, too, recognised the high priority of this project pro-posed by the PR of China, taking into account, in particular, that it complied very well with its own development intentions and policies. In its country-specific concept on development policies with the PR of China, the Federal Ministry of Economic cooperation and Development had stressed that one of its priorities of cooperation would be the support for China's economic reforms. Thus, important prerequisites were created, ensuring the implementa-tion of such a large-scale project, namely the condition that the project was embedded in the first-priority areas of the two countries' economic and development politics.

The objective of the project was:

"Industrial and road traffic statistics are directed towards the needs of the Chinese economic system."

The target groups of the project were you, the public and private decisions-makers as the users of official Chi-nese statistics. The aim was to improve your basis of information in the fields of industrial development and transportation.

During project implementation, there were repeated claims on the Chinese side that the quality and transparency of official Chinese statistics should be improved. The respective consultations and numerous training courses have sharpened the quality consciousness of the Chinese colleagues at the partner office and not least at the statistical offices of the provinces. The project has led to a sustainable increase in user-orientation of official Chi-nese statistics.

The project was built up in a very systematic way: at first, each technical subject was submitted to responsible people from the National Bureau of Statistics during five study and information trips to Germany. These actions were aimed at an exchange of information about the state of the art regarding the methods and procedures ap-plied in the two countries and at discussing the ways in which the targets of the various subjects could best be reached. They were also the starting signal for mixed project teams to be set up on the various thematic areas of the project.

Then, there were 28 consulting missions to the PR of China, while 10 training seminars and three consultations of Chinese statisticians were held in the Federal Republic of Germany and in Finland. In addition to experts from the Federal Statistical Office of Germany, these consultations were also attended by colleagues from statistical of-fices of the federal states as well as by colleagues from the Dutch and Finnish Statistics Offices, to whom I wish to express my particular gratitude.

More than 500 statisticians from the National Bureau of Statistics and the provincial statistical offices, the latter ones as multipliers, and about 40 German and international experts were involved in these consulting and training activities. In the context of project management, annual visits were paid to the Federal Republic of Germany and the PR of China for planning and regulating the details of the project. A comprehensive set of methodological documents was elaborated and translated into Chinese during project implementation.

This approach, which consisted of several stages such as fact description, joint planning and common implemen-tation of further training and consulting activities and which made sure that the different hierarchical levels as well as provincial and municipal offices participated in all activities, was another model-type factor for the action to become a success. During a first phase, the project was destined to impart the basic concepts and the most im-portant survey methods of collecting production statistics in the context of what is needed by the System of Na-tional Accounts. The System of National Accounts (SNA), elaborated by the United Nations, is the basic interna-tional framework of statistical rules, used to describe the circulation of economic flows and to calculate the eco-nomic performance of the entire country.

In a second phase of the project, work concentrated on the sophistication and application of methods and proce-dures imparted during phase one, and on the transition in practical work from predominantly quantity-based in-dustrial statistics to value-based industrial statistics. During this phase, too, all methodological and conceptual activities were oriented towards the needs of the System of National Accounts.

In April 2002, the project was terminated successfully, when the last activities were implemented by the Chinese party. These activities were attended by German experts and all problems were jointly solved taking into account the set goal and existing needs.

Both parties are convinced that the project has contributed to improving the accuracy, the reliability and, in par-ticular, the comparability of official statistics in China. The reorganisation of industrial and road traffic statistics was important not only from a methodological point of view. It was necessary, above all, in the context of eco-nomic politics, securing the statistical basis for decisions to be taken for the sake of developing industrial and road traffic statistics even further. Now, having timely and reliable quantity and price data on output, sales and the evolution of demand for the various industrial sectors on national and provincial levels, industrial and road traffic statistics are able to contribute adequately to China's economic development under market conditions.

As mentioned at the beginning, an important factor that turned the project into a success was our cooperation philosophy: we, the German statisticians, see ourselves as consultants. Our experts wish solutions to be devel-oped jointly with our partners, solutions which are in line with our partners' needs and overall conditions. We always take into account international standards. Our Chinese friends have always shared this philosophy without reservation, a philosophy which requires the project partner to act with a high sense of responsibility and auton-omy. The solutions originating from that cooperation will prove to be enduring and robust in practical implementa-tion.

In the course of the project it became clear that this approach allowed to achieve international standards more quickly, than it would have been possible by way of rigorous cuts and a complete restarting from scratch. This experience should be taken into account in future projects. The methods of a stepwise, gentle approach to the reforms was and is an essential condition ensuring implementation in the best possible way. We also succeeded in achieving high continuity regarding the composition of people involved in the project. This had a very positive effect on project implementation.

4.  Outlook

Concluding, I may be allowed to give a short outlook on future cooperation.

The focus of Germany's development cooperation with the PR of China is laid on such fields as "Consulting in the context of the economic, legal and structural reform, improvement of the overall political and social conditions" and "Environmental and resources protection". In these areas, there are needs for advice and cooperation now as before, including the need for an adequate statistical data base.

The PR of China is a country with the size of a continent. Thus, the needs for further evolution of official statistics can be measured only in the dimensions of a continent, such as, for example, Europe, and they could be com-pared with the current challenges faced by official statistics in the European Union. Another feature that could be compared with the challenges currently faced by European statistics is the difference in the prevailing conditions and in the level of development achieved by the various provinces, which constitute the very large territory of China, a fact that makes regional differentiation so immensely important also to Chinese statistics. This relates, in particular, to the determination of the regions' economic performance using the set of instruments provided by the System of National Accounts, but it also relates to the statistical activities which are devoted to the determination of poverty.

On many occasions, our Chinese partners expressed the wish that project-related cooperation should be carried on in other priority areas, a wish we will be pleased to fulfil as far as our possibilities allow that. Many themes are eligible here, such as e.g.

-  further improvement in the database of economic statistics, a need newly emerged by China's accession to WTO, in particular, the compilation of gross domestic product by region,

-  the growing importance of environmental protection and the careful use of natural resources, which is re-flected by the compilation of environmental accounts, i.e. a System of Green Accounts, or

-  the support of the Chinese statistics system in its efforts to meet the needs of the General Data Dissemina-tion System (GDDS) of the International Monetary Fund.

With their accession to the GDDS, participating countries commit themselves to observe certain standards for the dissemination of statistics and to ensure the transparency of the methods used. These standards deal with the four core economic sectors: production, taxes, finance and external trade and with the socio-demographic area. Some fields of official Chinese statistics have already been raised near to these standards by the reorganisation of industrial statistics. I regard the further implementation of these standards as a good starting point for future cooperation projects.

The big strategy paper of the European Union for the cooperation with the PR of China also lists a lot of ap-proaches applicable to official statistics. Germany's official statisticians are ready with pleasure to undertake commitments in cooperating with the PR of China also in a European context, provided that the Chinese partners agree to that.

As a matter of course, the same is true of a possible cooperation under other international projects such as, for example, those of the OECD, the IMF and the World Bank. I feel that the successfully concluded project on indus-trial and road traffic statistics is a very good recommendation for such plans.

There is wisdom in the Chinese saying that

"Knowledge that does not get bigger every day gets smaller."

As that is applicable also to statistical cooperation, this symposium shall not mark a terminal point, but an impor-tant stage on our common road towards good statistics.