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Wikileaks Reveals Chinese Top Officials Say Not To Trust Country's Economic Data

Tyler Durden's picture




 

The only thing less surprising than the knowledge that China is cooking its books, would be that the back office of the BLS is populated by a bunch of meth snorting, ecstasy crunching, dart (and occasionally feces) throwing, data manipulative simians. And while we have to wait for confirmation on the latter, it appears that among the thousands of Wikileaks disclosures is definitive proof that even China does not trust its own Department of Truth. The Telegraph reports that "China's economic figures are unreliable and not to be trusted, according to Li Keqiang, one of the country's most senior officials." And so we get yet more proof that the data behind the marginal bubble driving the global credit bubble to unprecedented stratospheric heights is complete garbage. But somehow the David Kostins of the world have the temerity to appear on CNBC, parade in their newly found Goldman Sachs partner status, and claim they know to the dot not only what will happen to a global economy, but where the S&P will close +/- 50 points....based on numbers which both far and near, are nothing but a complete and total fabrication.

But back to the now exposed fraud that is Chinese economic data gobbledygookery:

The 55-year-old is widely tipped to become China's next prime minister and is currently the country's executive vice premier, with responsibility for macro-economic management.

However, in private talks with the US ambassador in 2007, when he was still just the head of the Chinese province of Liaoning, Mr Li cast doubt on China's much-vaunted economic statistics.

A diplomatic cable leaked by Wikileaks, the whistle-blowing website, reveals that Mr Li described China's gross domestic product figure as "man-made" and "therefore unreliable".

What is not surprising, is that the three metrics that Li suggest as looking at for a true indication of how the Chinese economy is faring, all indicate substantial trouble both now and in the future.

Mr Li said he used three ways of evaluating Liaoning's economic activity, focusing on electricity consumption, the volume of rail cargo and the amount of bank loans disbursed.

"By looking at these three figures, Li said he can measure with relative accuracy the speed of economic growth," the cable said. "All other figures, especially GDP statistics, are 'for reference only,' he said smiling," it added.

Then again in a world in which everyone knows everything is a lie, if record bonuses and the middle class wealth transfer is to continue, this is pretty much known by everyone but acknowledged by no one. It is merely good to know that yet another factoid of contention, previously reserved for the "tinfoil hat" brigade, is confirmed to have been in fact, fact.

 

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Mon, 12/06/2010 - 11:45 | 782009 koeleköpke
koeleköpke's picture

don't they produce printers in Shenzhen !  did they import gold or tungsten ? who cares !

Mon, 12/06/2010 - 11:45 | 782010 BigJim
BigJim's picture

I <3 ZH.

Mon, 12/06/2010 - 11:54 | 782040 nobita
nobita's picture

me too. greatest website in the history of the internet.

Mon, 12/06/2010 - 14:13 | 782652 Kopfjager
Kopfjager's picture

A day spent reading zerohedge supersedes 6 years of academics.  

Mon, 12/06/2010 - 11:46 | 782012 Bring the Gold
Bring the Gold's picture

What happend to WL's stance on protecting the guilty...I mean innocent officials?

Oh I guess that only applies to some targets.

WL credibility still not going anywhere in my book until a big boy is targeted.

Mon, 12/06/2010 - 11:56 | 782045 Winston Smith 2009
Winston Smith 2009's picture

BoA is apparently in their "insurance" file. And the US government would probably have incriminating evidence relating to the "big boys" only in Top Secret material and above which Manning apparently didn't have access to on his terminal.

Mon, 12/06/2010 - 12:10 | 782097 Bring the Gold
Bring the Gold's picture

I'm with Thanatos and others that taking info off a Siprnet server would be instantly noticed. The question is why has the material that has reached WL, reached them? Are they a useful tool for intel agencies, have the leaks all just luckily advanced the case for war with Iran? Things that make you go hmm...

Also Assagne's family had some weird Intel operations stuff going on. Psychadelics and kids sounds an awful lot like one of the many CIA mind control programs of the 1970's as uncovered in the Church hearings (MK Ultra etc.).

I'm agnostic on this one, but until I see something truly big leaked I'm skeptical.

Mon, 12/06/2010 - 12:03 | 782076 aint no fortuna...
aint no fortunate son's picture

How'd ya like to be Li Keqiang these days?

Mon, 12/06/2010 - 12:11 | 782098 Bring the Gold
Bring the Gold's picture

Exactly. Revealing some western diplomat's name might cause embarrassment or get them fired, this guy is a dead man walking.

Mon, 12/06/2010 - 11:50 | 782016 boricuadigm-shift
boricuadigm-shift's picture

Up Up and awa... Crash!  How is this news? I mean the sheeple wont read this.  Here in ZH we knew this thanks to the 24 hour construction post and Hugh Hendry.

.

Mon, 12/06/2010 - 11:47 | 782019 TrafficNotHere
TrafficNotHere's picture

"Mr Li said he used three ways of evaluating Liaoning's economic activity, focusing on electricity consumption, the volume of rail cargo and the amount of bank loans disbursed."

Does anyone have information on these numbers?

Mon, 12/06/2010 - 14:18 | 782674 Kopfjager
Kopfjager's picture

I also want to know how we estimated the Soviets economic might.  Granted, this isn't a credible source but I think in "The Age of Turbulance," Alan Greenspan mentioned that after the Berlin Wall came down, the size of the Soviet economy was only 15% of what some "economists" estimated.  I have it in my room somewhere... should go find it.  My numbers could be off or way off but I'm curious how similar the methods are.  

Mon, 12/06/2010 - 11:49 | 782021 RowdyRoddyPiper
RowdyRoddyPiper's picture

Methinks he isn't tipped to be China's next Prime Minister anymore.

Mon, 12/06/2010 - 11:49 | 782024 stoneman sacked
stoneman sacked's picture

Shanghai Statistics bitchez

Mon, 12/06/2010 - 11:50 | 782025 SheepDog-One
SheepDog-One's picture

Communist Chinas economic data is largely made-up and unreliable? Frankly Im shocked...they should be more like our US Gooberments totaly reliable and honest data.

Mon, 12/06/2010 - 13:03 | 782323 Rick64
Rick64's picture

Yeah, wonder where they got that idea.

Mon, 12/06/2010 - 11:52 | 782029 stoneman sacked
stoneman sacked's picture

Methinks zerohedge is banned in China.

Sheeple can't  know even if they wanted to

Mon, 12/06/2010 - 11:52 | 782030 Cash_is_Trash
Cash_is_Trash's picture

Cooking the books is a delicious recipe

Mon, 12/06/2010 - 11:52 | 782032 DeanTheMachine
DeanTheMachine's picture

I lived in China for a year, and everyone I talked to about this subject already knew it.  Government stats are way overblown.  The suckers around the world don't realize how China operates (there's a lot of 'saving face' and unwillingness to confront hard truths).

Mon, 12/06/2010 - 12:05 | 782087 Thunder Dome
Thunder Dome's picture

Hmm, that sounds a lot like USSA.

Mon, 12/06/2010 - 12:44 | 782225 TeamAmerica
TeamAmerica's picture

Hyperbole. You are letting the Chinese off the hook with a nonsensical comparison like this.

Better to compare China to Madoff.

Mon, 12/06/2010 - 11:53 | 782033 Smiley
Smiley's picture

Oops, somebody's family may be getting charged for the cost of a bullet...

 

Mon, 12/06/2010 - 11:54 | 782038 bonddude
bonddude's picture

Didn't need Wikileaks to know that hot one!

Mon, 12/06/2010 - 11:54 | 782043 JimmyTheHand
JimmyTheHand's picture

Anyone wanna take a stab at Mr. Li's life expectancy after this article gets translated?  No pun intended...

Mon, 12/06/2010 - 11:59 | 782056 SheepDog-One
SheepDog-One's picture

He may be safe, Zerohedge is likely banned in China.

Mon, 12/06/2010 - 12:33 | 782178 TeamAmerica
TeamAmerica's picture

This revelation comes via WikiLeaks, not Zerohedge, and you can bank on the Chinese poring over the documents in detail.

Mon, 12/06/2010 - 11:57 | 782051 gwar5
gwar5's picture

They all lie and so does our side. It's an art form.

Mon, 12/06/2010 - 11:58 | 782052 jesusonline
jesusonline's picture

Seriously, Tyler. You're doing a great job with ZH, always done. But dude(s) - get a damn clue about Wikileaks. Else you're lining up along NYT, Le Monde, etc in pushing these "leaks".

China is manipulating its data. No shit.

So next time we need a Wikileaks approval to make sure that Earth is round?

Mon, 12/06/2010 - 12:11 | 782100 Tyler Durden
Tyler Durden's picture

That China somehow magically pulled a 4.4% inflation number for
October out of its hat is not surprising. After all this is precisely
the number that the "local market" was expecting as there are no secrets
in China, even if the Bloomberg surveyed Keynesian
fundamentalists-cum-economists end up being "pleasantly surprised." Yet
none of this is at all relevant: now even Credit Suisse's Sean Keane
(see below) is openly ridiculing the magic 8-ball that the Chinese
department of truth is. The only open question is whether this
acceleration in the economy to a two year high will lead to a rate hike.
And the answer, as Bank of America says, is no. Which means a whole of
nothing is about to happen as a result of this latest non-news which
just confirms that China's economy is telegraphed to be overheating at
precisely the rate that its politburo has determined is just right.

First, the hilarious observations from Credit Suisse on the random number generator that China's economy is:

It’s worth noting that the local market is now expecting tomorrow’s October inflation print to come in at 4.4%
[TD: we have a bingo], above the Bloomberg consensus of 4.0%. As the
local Chinese market has a very good track record of correctly “predicting”
data before it is officially released the reaction to a 4.4% number may
be less of an outlier than it appears. When looking at this data its
always worth remembering that somehow China is able to assemble data
from around the country at a speed that defeats most better equipped
statistical agencies around the world, and it does so across a
geographical space many times as large, and with a sample set that
should be hundreds of times bigger. How exactly this is done with such remarkable speed (given the lack of electronic payment data) remains a mystery.

All
one can do is LOL at this definition of GIGO. And yet this very
bullshit is what drives trillions in capital flows around the world
based on a fact point that is totally devoid of any factual
significance. EMT indeed.

From China Wants World To Believe Inflation Jumped By 4.4%, In Line With Shadow Expectations, Fastest Fake Price Growth In Two Years.

Mon, 12/06/2010 - 12:14 | 782110 Spalding_Smailes
Spalding_Smailes's picture

A monkeyhammer for jesusonline.

Mon, 12/06/2010 - 12:28 | 782146 Bring the Gold
Bring the Gold's picture

You are inspiring me almost daily now to train an Orangutan ala "Every which way but loose" to use a ball peen hammer and send him your way.

Mon, 12/06/2010 - 14:20 | 782691 LFMayor
LFMayor's picture

"Clyde, scrap the caddy..."

Mon, 12/06/2010 - 12:27 | 782147 Bring the Gold
Bring the Gold's picture

Silly double post.

Thu, 12/16/2010 - 16:39 | 812328 Cash_is_Trash
Cash_is_Trash's picture

So they don't also have the world's fastest computer? Aw, really..

Mon, 12/06/2010 - 12:32 | 782167 karzai_luver
karzai_luver's picture

GLOBAL ELITES bitchezz!!

Mon, 12/06/2010 - 12:32 | 782176 jesusonline
jesusonline's picture

This is very informative, thank you. Then why not report that a 39k 9.8% unemployment number last friday was printed to be an excuse for extending unemployment benefits for those 2 million people running out of it? (curiously, on the same day when deficit panel ended in a dud) But alas, these days we have to listen up to what "light" Assange has to shine on the world. And hey, Spalding, it is exactly the Wikileaks thing that's a monkeyhammer. You keep beating youself on the head and think it'll make you smarter. Good luck with it

Mon, 12/06/2010 - 14:01 | 782606 Tyler Durden
Tyler Durden's picture

From M2, Up 19 Out Of 21 Consecutive Weeks, Hits Fresh All Time High Of $8,809,200,000,000

And once again we are back to discussing just how the Fed does "not"
print money... Or does it? If the data from the just released M2 is to
be believed (which is becoming near impossible now that even critical
economic data is gamed merely to achieve policy goals - today's NFP
number was nothing more than Obama's way to get his
desired UI extension; look for a surge in the December NFP numbers as
the spin machine picks up back on the economic recovery trope), the $1
trillion in Fed excess reserves continues to trickle into broader
currency aggregates. To wit: last week M2 grow by $10.3 billion, which
is a fresh all time high of $8,809.2 billion (this was at $4.6 trillion
at the beginning of the decade). This more cheap money that is
increasingly making its way into commodities and risky assets. For now
it is a trickle. Soon, it will be a flood.

Here's a thought: why don't you first read what is on Zero Hedge before commenting?

Mon, 12/06/2010 - 13:27 | 782468 bankonzhongguo
bankonzhongguo's picture

Just to put a few more nails in my own coffin. 

I can at least concur with Mr. Li's "observations" after working for one of these PRC state banks and I am more than familiar with the political intrigue of Liaoning per se.  However, Mr. Li can just say; 'The lying Americans made it up. What do you expect?  America will always blame China for its own problems.'  No big whoop.

However, the whole 'bank loan" metric is also super suspect as I personally ran those numbers for years and I could never get better than plus/minus 20% in accuracy and that NEVER addresses real non-performing loans - GIGO.  You still do not have a strong enough independent workforce to clean up data and otherwise overcome the local management spin, nor the 10 year workouts at the provincial command branch, or some phantom phone call in the night from Head Office.  You send $10 million out to some PLA SOE and it still unpaid or collateralized by a "Letter of Comfort" after 10 years - its still a performing loan.  Go figure.

The only thing you can do is count the street lights at night. 

I'm sure things are getting better, but considering the feudal nature of China, these types of things will always be a factor.

Cha bu dou.

 

Mon, 12/06/2010 - 12:01 | 782067 the not so migh...
the not so mighty maximiza's picture

i can't belive its not butter. A dishonest communist, naa never

Mon, 12/06/2010 - 12:02 | 782069 sabra1
sabra1's picture

will he be shot?

Mon, 12/06/2010 - 12:03 | 782072 Gimp
Gimp's picture

Wikileaks is uncovering the lies and corruption the world pretends are legitimate entities/governments. Great job, their new url btw is:

www.wikileaks.ch

Gubbermints are doing all they can to crash their servers so they moved to Switzerland(for now)

I wonder when they will go after ZH????

Mon, 12/06/2010 - 12:03 | 782077 Thunder Dome
Thunder Dome's picture

Li will not make it through the night.  Guernica

Mon, 12/06/2010 - 12:04 | 782080 Shameful
Shameful's picture

All nations lie about their economic numbers. Sure this is a tradition in China with Mao and all. Sure there is huge imbalances in China that the market will try to purge, just like most of the world. Don't think they are a safe investment but at least they have some manufacturing and infrastructure that they should be able to pick themselves up faster if/when purge the malinvestment.

Mon, 12/06/2010 - 12:04 | 782081 kaiserhoff
kaiserhoff's picture

Well that's a bummer.  I've been calibrating my atomic clock off the ever more precise GDP data coming from the Chicoms.  Gone the way of all good things:(

Mon, 12/06/2010 - 12:11 | 782101 Fred123
Fred123's picture

Looking good for Hugh Hendry and Jim Chanos on the asian Enron..... :)

Mon, 12/06/2010 - 12:13 | 782104 Kat
Kat's picture

yep.  And U.S. government stats aren't all that reliable either.

Mon, 12/06/2010 - 12:14 | 782112 Calmyourself
Calmyourself's picture

Paging Fat Ass Willy.. The system of oligarchial fascism needs some support, paging Fat Ass Willy..

Mon, 12/06/2010 - 12:15 | 782114 ImNotExposedToS...
ImNotExposedToSpeakAnySuchInformation's picture

Sounds like a foundation for bargaining positions regarding the "market value" of the yuan.

Mon, 12/06/2010 - 12:16 | 782116 Occams Aftershave
Occams Aftershave's picture

Julian Assange is Frodo heading to Mordor clutching the Ring.

Mon, 12/06/2010 - 12:25 | 782140 Bring the Gold
Bring the Gold's picture

More like Isildur refusing to throw the ring into Mt. Orodruin. 

Mon, 12/06/2010 - 12:36 | 782191 Calmyourself
Calmyourself's picture

Keep the ring, throw BOA in the fire..

Mon, 12/06/2010 - 12:37 | 782197 TeamAmerica
TeamAmerica's picture

Wrong.   Assange = Smeagol.  Time will tell if he becomes Gollum.

Mon, 12/06/2010 - 12:17 | 782119 scythian empire
scythian empire's picture

Lets estimate the probability of Moodys and S&P doing the ostrich manuever.

Mon, 12/06/2010 - 12:31 | 782158 Rogerwilco
Rogerwilco's picture

Commodities and PM prices headed to the moon, because China is "growing".

No RE bubble in China, their economy is "growing".

Overcapacity? Not in China, domestic demand is "exploding".

Where is the Pets.com sock puppet? Oh yeah, it's made in China now

Mon, 12/06/2010 - 12:32 | 782169 johngaltfla
johngaltfla's picture

In other shocking news:

Grass is green.

The sky is blue.

Banksters lie.

Back to you Ron Burgundy....

Mon, 12/06/2010 - 12:36 | 782192 A Nanny Moose
A Nanny Moose's picture

+1.  You Stay classy San Diego.

Mon, 12/06/2010 - 12:57 | 782293 mirac
mirac's picture

I like Ecstacy...and booze too.  Speed and shorting this market, kills.

Mon, 12/06/2010 - 13:04 | 782332 bigdad06
bigdad06's picture

Why is this news? Stevie Wonder saw this years ago!

Mon, 12/06/2010 - 13:05 | 782338 Horatio Beanblower
Horatio Beanblower's picture

First Paypal...

 

"The Swiss post office bank, PostFinance, has frozen the accounts of Wikileaks founder Julian Assange." - http://www.bbc.co.uk/news/world-11929034

Mon, 12/06/2010 - 14:27 | 782726 JackES
JackES's picture

Why are there so many 'xxxx' in wiki's reports?

Mon, 12/06/2010 - 15:04 | 782860 qussl3
qussl3's picture

Read as short the aussie.

Mon, 12/06/2010 - 15:29 | 782936 harshudeshpande
harshudeshpande's picture

very funny. I had written this blog http://www.systomatics.info/?p=43 in 2009 explaining how and why such a thing happens in Asia.

Mon, 12/06/2010 - 16:02 | 783045 tony bonn
tony bonn's picture

i love me some wikileaks and julian assange....i am glad to see that the ministry of truth is, well like paula jones - not to be believed.

of course anyone who thought that the makers of the tiananmen square massacre were to be believed is, well like a fucktard - not to be taken seriously,

Mon, 12/06/2010 - 17:53 | 783523 Toburk
Toburk's picture

And how are we suppose to know if the secondary measures of economic activity are accurate?

If electricity consumption, the volume of rail cargo and the amount of bank loans disbursed are widely know to be better measures, who says the bureaucrats won't manipulate those measures as well?  Hell, how do we measure them in the first place? 

The "just leave the lights on" approach would not be too hard to fake, speaking of which, how about all those neon signs everywhere? Besides, I do beleive we have all heard about "loan distribution" in China.

Mon, 12/06/2010 - 18:21 | 783630 Capitalist10
Capitalist10's picture

Anyone know where to access current data for the three supposedly reliable Chinese economic data points?  Chinese markets are looking decoupled and pretty sickly to me.

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