China’s statistics bureau said it “condemns” leaks of economic data and those responsible will be punished, after the office released economic indicators that matched rumors circulating in the market and online Saturday. “We believe any illegal behavior will be punished by law,” Sheng Laiyun, a spokesman for the department, told a briefing in Beijing Sunday. “Those spreading state secrets on the Internet or other public information networks should be held accountable.” China’s first-quarter growth figure and other monthly economic data including the inflation rate were leaked Saturday ahead of the official release. Phoenix Satellite Television Holdings Ltd. reported 10 economic indicators on its website Saturday morning, citing an unidentified source. Figures released later yesterday by China’s central bank and today by the National Bureau of Statistics matched 9 of the numbers. Hong Kong-based Phoenix Television declined to comment. “Key data are widely circulated in the Chinese bureaucracy prior to their release,” said Brian Jackson, an emerging markets strategist at Royal Bank of Canada in Hong Kong. “The recent accuracy of market rumors must raise concerns about the integrity of the process.” China’s economy, the world’s second-biggest, grew a more- than-estimated 9.7 percent in the first quarter and consumer prices rose 5.4 percent in March from a year earlier, the fastest pace since 2008. The benchmark Shanghai Composite Index rose 0.3 percent to 3,050.53 at the 3 p.m. close today, reversing a decline of 0.3 percent Saturday. ---------------Improving the system Government departments, institutions and individuals have a responsibility to keep state secrets, Sheng said at the briefing. The bureau has narrowed the personnel who have “dealings with relevant information,” he said. The bureau is studying ways to improve the system, including shortening the time-frame between production of the information and its release so as to reduce risks, Sheng said. The Phoenix TV site said March consumer prices would rise 5.3 percent to 5.4 percent, while rumors circulating on China’s microblogs by yesterday afternoon had a consensus on 5.4, which also matched the official release Sunday. Jiang Guangce, a Shanghai-based partner and fund manager at Congrong Investment Management Co., got the correct numbers for China’s gross domestic product and consumer price index from a Hong Kong fund management company Saturday. --------------‘Normal in China’ “It’s normal in China, there are always channels for this sort of information,” Jiang said in a phone interview Sunday, “The short side and the futures market in Hong Kong are always a step ahead. This is a result of China’s power structure.” It was the fifth time in six months that an accurate consumer price index number was circulated in the market and reported in the media before release. It’s become one of the most sought-after numbers because of China’s battle to curb inflation, which jumped to a 32-month high in March. Early disclosure happens because too many government offices see data before they’re made public, He Keng, a former deputy head of the department and now a member of its consulting committee, said in an interview last month. “A new set of procedures just has to be developed,” said David Cohen, a Singapore-based economist at Action Economics. “They’ll have to give more authority to the people in charge of data collecting and dissemination, and make clear to people, such as those in the central bank, not to talk about it.” Any unauthorized release violates the Statistics Law and is punishable by a warning, demotion or firing, according to a rule issued by the government in March 2009. A legal “loophole” means China’s laws don’t count profiting on leaked economic indicators as insider trading, according to Yan Yiming, a Shanghai-based securities lawyer. (Source: Bloomberg)