Chinese Province Admits It Fabricated Economic Data For Three Years

Tyler Durden's picture

While it will hardly come as a surprise to China watchers who have for years mocked China's cooked "data", overnight the state-run People's Daily reported that the severely impacted by the commodity crunch of the past 2 years rust-belt province of Liaoning fabricated fiscal numbers from 2011 to 2014, raising fresh doubts about the accuracy of China’s economic data just two days ahead of the release of China's GDP report.


The city of Shenyang in Liaoning province of China

City and county governments in the northwestern region committed fiscal data fraud in the period, Governor Chen Qiufa said at a meeting with provincial lawmakers Tuesday, Bloomberg adds. Not surprisingly, the fabricated economic data was meant to show a state of economic strenght with fiscal revenues inflated by at least 20%, and some other economic data were also false, the paper said, without specifying categories.

Why paint a rosier picture? The same reason as alwasy: Chen said the data were made up "because officials wanted to advance their careers." The fraud misled the central government’s judgment of Liaoning’s economic status, he said, citing a report from the National Audit Office in 2016.

The admission of fraud comes now because with growth now moderating, officials have "sought to improve the credibility of economic data" as diffusing financial risks becomes a key policy consideration, along with keeping growth ticking along at a rapid clip.

And while the outgoing Obama administration is cracking down on "fake news", Ning Jizhe, head of the National Bureau of Statistics, has said China is focusing on preventing "fake economic data" as well as increasing the quality of its statistics. Naturally, incidents such as this one will make China watchers that much more skeptical.

Fake economic data may be the least of Liaoning's worries which in recent years has seen an unprecedented purge of more than 500 deputies from its legislature Bloomberg reports. The deputies were implicated in vote buying and bribery in the first provincial-level case of its kind in the Communist Party’s almost seven-decade rule, according to the official Xinhua News Agency. Former provincial party chief Wang Min, who led Liaoning from 2009 until 2015, was earlier expelled following corruption allegations by China’s top anti-graft watchdog.

As China's debt-fueled economic impulse continues, if only for a few more months, we wxpect more such instances of fake data to swim to the surface.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Ghost of PartysOver's picture

Paging Mr Holmes, Mr "No Shit" Sherlock Holmes.  Please meet your party at the Fake News Stand.

NoDebt's picture

China is the greatest lie of the 21st century.  All the books are cooked.  Everything is a lie.  ALL. OF. IT.

 

Antifaschistische's picture

agree with no NoDebt, but the part that isn't a lie, is that there is a billion people there who are hard working and want to do everything they can to advance their own lives.  This force, will continue put enormous pressure on the worlds economic landscape and their 'fake books' won't stop that.   There will be a series of wakenings in China when their own investors discover the BS financial products they bought are just that...BS.   At that point, I believe the Chinese will return to investing more in their own families and their children as they have done, and continue to do today.

NoDebt's picture

I think they might have their hands full dealing with the collapsing demographics of their vast population and the fact they're trying to run a capitalist-like economy but laid over a communist government that's still doing Soviet-style 10 year plans.

 

 

techpriest's picture

The key word in the title is "Admits." I would not be surprised if every single province has people cooking the books. Just like the old days under Mao - you can't tell the truth so to keep your position you tell convenient lies.

The Saint's picture
The Saint (not verified) techpriest Jan 18, 2017 12:15 PM

Hey, the Chinese have just SOLVED their polution problem!  You won't believe how easy it was.

The government told local weather forecasters to stop issuing SMOG ALERTS!  See how simple that was?  Problem solved.

https://www.yahoo.com/news/chinese-authorities-tell-local-weather-foreca...

 

FreedomGuy's picture

Provincial governors get GDP goals from the central committee. It's not a lot different than the old five year plans. These are usually senior people who grew up in the Mao era. Not meeting your goals at least on paper could be injurious to your career and health.

So, they build empty buildings and also fake the data. If China is cracking down the they may be realizing the extreme peril they are in economically.

I have been to Shenyang and Fushun many times. There are large numbers of huge empty buildings, even neighborhoods. I have seen what appear to be inactive factory buildings, as well. Yet, construction continues. I can only imagine the number of NPL's they are hiding.

I suspect much of China is the same.

CorporateCongress's picture

I would be surprised if there is a single province which hasn't cooked the books

Ponk's picture

Statistics everywhere are dubious, but for those, and there are some here, who think China is a lie, think again. The Western world might be in cultural decline, riven with culture wars, overrun by experimental immigration policies, deindustrialised, etc. Not China. Sure, their country, especially the North East has been heavily polluted, they have an unsustainable gender imbalance and their financial system is a gargantuan shell game, but, it doesn't matter, because they are culturally resilient. If you had actually spent time in China you would know that Chinese are tough as fuck and they never stop hustling. Finally, they're making shit over there, lots of it. Every day they do it a little better. THe whole country is essentially an enormous manufacturing research lab using the last decades of human labour to position themselves for the inevitable rise of full robotic automation. Wait for the 'historic' deal they make with Japan in a decade or two, Korea and Taiwan even earlier, then fuggedaboutit

Rabbi Chaim Cohen's picture

Indeed. Why anyone would take the ChiCom's word when there is no impartial oversight to confirm or refute their economic claims is beyond me. All seems to be untruth these days. Pity.

Darktarra's picture

No way!  No way in hell the Chinese could have LIED about their economy!  In the same fashion there is NO WAY the Obama administration could have lied about the American economy these last 8 years! 

BennyBoy's picture

 

US Admits It Fabricated Economic Data For Thirty Years

CPL's picture

30?  No, since 1910.  It's okay though, teams are standing by to black bag Lael Braintard and 'friends' once midnight rolls over.  Why bother with the puppets when you can make cat gut strings from the fat cat herself.

Arnold's picture

I would say mid 60's

when UHF channels became popular and

needed a lot of content besides Stooges reruns.

doctor10's picture

Welcome to Soviet Union 2.0!!

We all know how well THAT turned out for the Soviet oligarchs!

ebworthen's picture

Ghost cities, ghost data.

venturen's picture

Historians are going to have a field day with the period of 2008-2016 and the fraudsters who were allowed to operate....hopehully many of them will be jailed over the next 8 years

Obama should be kept in a secure location....like Guantanamo! 

techpriest's picture

[sarc]
But, but... the Dear Leader told us that history is on his side!
[/sarc]

[reality]
It's time to question the myth of inevitability.
[/reality]

Kirk2NCC1701's picture

This is nothing new.  In fact, it was SOP in all communist countries, and most companies.

clade7's picture

Right?  Whats next?  Chink Pussy aint sideways?

Kayman's picture

How much pig iron did your village make for the Great Leap Forward?  One ton.

Bound in sand.

China is founded in the Big Lie.  Pedophile Mao encouraged the illiusion.

angry_dad's picture
angry_dad (not verified) Jan 18, 2017 11:19 AM

Too bad the chinx didn't do as Obama and just issue a monthly economic DOWNWARD REVISION after the MSM was distracted by another red herring issue.

ONCE TRUMP is sworn in, expect an 8 year DOWNWARD REVISION on the results of the dem debacle that collapsed the world economy, 8 endless years of war, the largest transfer of wealth in the history of the planet,  and the colossal health care fraud.

Lost in translation's picture

What?  China falsifies its numbers?  NO!  That's un-possible!

Because Jim Rogers would have told us.

Darktarra's picture

So then all this investment in China is really going to build up their military and nothng more?!

hoyeru's picture
hoyeru (not verified) Jan 18, 2017 11:25 AM

So what? THey must have learned it from the American gov who has been fabricating economic data for decades, claiming inflation is low while claming war  spending is economy.

Shed Boy's picture

"because officials wanted to advance their careers." Global SOP. Happens daily in the good ol USA. Fake news, fake numbers, fake tits, fake honesty...the world is a phoney place.

techpriest's picture

I'm currently reading "The Board Book," which is a manual for board members for large organizations.

When it comes right down to it, if the folks at the top do not investigate what is going on, and they do not reward honest appraisals of what's going on in their organization, then corruption will surely infect the entire structure. If you reward people who tell you what you want to hear, you will soon be surrounded by such people.

It seems that President Xi's orders to block selling during his time at Davos is an admission that his ego can't handle an admission of failed policy. Either that or he knows that his head is going to end up on a stick, and it's going to be put there by his own Party.

Stan522's picture

Goverments LIE!

Duh.....

Iconoclast's picture

Only 3 years? Telling lies is a national sport in China, they go away on international stiffing contests and always win the gold, silver and bronze medals.

The huge elephant in all of our rooms is the gargantuan amongst of money China has simply and quietly brought into existence as debt, under their own fiat/fractional reserve system; they adopted the westerners system and injected it with growth hormone, creating hundreds of billions of yuan for their folk to convert into other currency, to go shopping abroad with, whilst bundling/building up asset debt bubbles the likes of which we've never seen before. Once this collapses it'll make Lehman look like a kid crying over his smashed piggy bank.

dude duderson's picture

and no one will do shit about it, float the fake markets and keep sheeple talking about the big game

JohnGaltUk's picture

You can never trust a man you can blindfold with a shoe lace

romanmoment's picture

China fabricating economic data?  Who would of thunk it....?

MrBoompi's picture

BLS needs to hire these guys.  They're always looking for new ways to fudge data.  

Publicus's picture

Basic income is going to solve all of China's problems.

youngman's picture

FAKE... CHINA..those words were born together..

barysenter's picture

Kalifornia dreamin

Starkman's picture

Sheesh! Just the picture alone tells the truth!

Yen Cross's picture

   The whole of China is a triple rehypothecated fabrication.  Does that guy own a nailgun factory?

LawsofPhysics's picture

So, governments lie?

This is NOT surprising nor is it news to anyone.

CHoward's picture

Wow - who would have thought?  The Chinese REALLY are like the Americans!!  Liars figure, firgures lie. 

Justin Case's picture

Keynesian problem #1: while lower prices help an economy if consumers and companies use the savings to buy and invest, protracted price declines may encourage them to delay spending in the belief that waiting will result in still lower costs in the near future, dragging down already slowing growth. While this is great news for consumers, it is terrible for levered corporations who provide goods and services. And in a country in which total debt is 3.5x more than GDP deflation, any accelerating deflation means a debt crisis, with trillions in bad debt finally floating to the surface, is inevitable.

Of course, the longer China does nothing, the greater its problems will become as the status quo is the status quo is also fundamentally destructive. As such Beijing needs to choose: either collapse the economy in a deflationary wave, leading to a debt crisis and widespread social unrest, or devalue massively overnight in hopes of stimulating inflation, leading to collapsing profit margins, and even more widespread social unrest.

In short, our condolences China: having decided to adopt Western neo-Keynesian economics, with the typical monetarist bent, you too are now trapped with no way out. But don't worry: so is everyone else. Good luck.

ali-ali-al-qomfri's picture

Communist Party admits it fabricated a Chinese province for three years.

 

 

when the cats away the maos will play

 

Hail Spode's picture

Same reason US gov. people do it....

orangegeek's picture

Chi-coms don't lie.

 

Remember no selling the Shanghai or you get firing squad treatment.

 

LMFAO - stupid fucking communist shithole!!!

hotrod's picture

SAME THING WELLS FARGO DID.  Fabricated accounts.  EVERYONE IS DOING IT TO KEEP THEIR JOB.  Obama did it to win re-election.  ROFL EVERYONE IS LYING.

Goldbugger's picture

The US Government has been fabricating lies since the inception of the Federal Reserve. Control the money and you control the sheep.

yttirum's picture

Just like many buying into the "China has a great military" meme. People only believe that shit because they watch Hollywood movies that are funded by the Chicoms to fling out propaganda. Yeah great military, with only ONE carrier! I won't even get into the subs, assault ships, etc., compared the US military. Get real folks, we've been played on all levels when it comes to China - It's a PAPER TIGER. Yay Communism! We have 1.4 billion slaves and can only build 1 aircraft carrier, but we're a super-power, ya know. Good luck to all the bet on China dupes.

11b40's picture

You better shut up! John McStain disagrees, and he wants to buy a whole bunch of new whizz-bang MIC toys to make sure we can stand up to them dirty commies. Your kind of talk might make folks start to question his plans.