This page has been archived and commenting is disabled.

China Misses 3 Trillion Yuan But You Should Trust Inflation and GDP Data

Tyler Durden's picture




 

In yet another accounting error (or not), a sovereign nation accidentally missed a large amount of debt that it owes. Bloomberg (via The Economic Observer) is citing data from Beijing Fost Economic Consulting that ~3tn yuan ($473bn) of debt in township governments was not included in China's National Audit Office reports. This is not a drop in the ocean as it raises the local government debt load by around 30% and represents debt in vehicle financings and bank loans. Of course, we should remain calm and walk (not run) to the exits as GDP, inflation, and whichever macro data point you choose that has subliminally met expectations recently is completely accurate - have no fear.

 

From Bloomberg:

China’s National Audit Office didn’t include ~3t yuan ($473b) of debt in township governments in report, Economic Observer says, citing data from Beijing Fost Economic Consulting Co.

 

China’s local govts. of 4 levels may have 13.5t yuan in debt vs 10.7t yuan reported by audit office: Observer

 

Debt in local govt. financing vehicles, bank loans underestimated in audit report: Observer

 

Duyang town in Guangdong province has >200m yuan of debt vs annual fiscal income of 500,000 yuan: Observer

 

Astounding!

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Sun, 11/13/2011 - 19:51 | 1874294 DeadFred
DeadFred's picture

The official denial (or nuclear tipped missle) will arrive in a few minutes.

<fingers crossed for the denial option>

Sun, 11/13/2011 - 19:58 | 1874306 trav7777
trav7777's picture

bbbbut...bbbbut...China is the FUTURE.  They're going to take over everything.  They are so slanty-eyed and devious and smart, which is why they invented all of the technological marvels of the past 500 years

Sun, 11/13/2011 - 20:02 | 1874314 DaBernank
DaBernank's picture

Bbbbut, this is all part of the 5000-year plan that the brilliant CCP officials have mapped out.

Sun, 11/13/2011 - 20:20 | 1874338 Minimum Clearance
Minimum Clearance's picture

Not just brilliant planners -- thay've also shown themselves to be good at executing.  

 

 

Sun, 11/13/2011 - 21:57 | 1874475 Harlequin001
Harlequin001's picture

'Duyang town in Guangdong province has >200m yuan of debt vs annual fiscal income of 500,000 yuan: Observer' - Fucking Priceless.'

There's a reason why manufacturing is done locally/domestically under a gold standard and investors are wary of country risk. It is the reason why England took Hong Kong from China. It is called default risk and just plain foreign government bullshit risk aka lies.

If nothing else, this should result in the return of considerable numbers of jobs as investors now balk at investing in a country like China where the ability to accurately measure the preformance of your investment is now seriously undermined. This is a good thing for domestic manufacturing and hopefully the first of many nails in the coffin of globalization by investors scared of losing their money. If they don't then they deserve to lose their money as a consequence of the real risk of investing in a foreign country.

Sun, 11/13/2011 - 22:39 | 1874529 TheFourthStooge-ing
TheFourthStooge-ing's picture

With more than 200 million yuan of debt and annual fiscal income of 500 thousand yuan, it appears that Duyang town's brirriant pranners must have received their MBAs from American correges.

 

Mon, 11/14/2011 - 00:25 | 1874673 trav7777
trav7777's picture

oh yeah, this is all OUR fucking fault...right.

Everything is.  From inability of africans to feed their own children to the uttery insanity of debt loads of Chinese towns.

WTF is wrong with you?

Mon, 11/14/2011 - 01:37 | 1874793 Harlequin001
Harlequin001's picture

You need to chill out Trav old stick. 3 trillion might sound like a lot but when you look at this in perspective, in Monopoly terms it might buy you Fleet Street, or possibly an old boot.

Alternatively in air miles terms it might buy you around 42 feet...

maybe not...

Mon, 11/14/2011 - 09:54 | 1875278 TheFourthStooge-ing
TheFourthStooge-ing's picture

trav7777 totally missed the point when he claimed:

oh yeah, this is all OUR fucking fault...right.

No, it's their fucking fault for being too blinded by greed to learn the real lesson offered by "morning in America": borrowing and leveraging your way to false prosperity is a primrose path which is best avoided.

Everything is.  From inability of africans to feed their own children to the uttery insanity of debt loads of Chinese towns.

WTF is wrong with you?

Apparently I'm lacking a persecution complex.

 

Tue, 11/15/2011 - 17:39 | 1880332 Barbar
Barbar's picture

so whoever happens to be fucking the world in the ass right now it's their fault. that just happens to be, err, yeah, it's liechtenstein actually...sorry, nevermind...

Sun, 11/13/2011 - 21:19 | 1874430 High Plains Drifter
High Plains Drifter's picture

remember, each chinese family is only officially allowed one child per party policy. they don't want girls. they want boys. so when they have a girl, they keep doing it until the get a boy.........so the chinese population control operation is not working all that well either.........chinks are smart..........real schmart.........

Mon, 11/14/2011 - 00:28 | 1874682 jekyll island
jekyll island's picture

Not exactly, there are about 30% more males than females in China and THAT is a problem.  There are going to be a lot of single young males that will have no prospect of finding a woman to marry.  How do you think that is going to play out?  Riots?  Revolution?  War?  All of the above?  China's housing bubble is going to sink their economy and then they will have millions of hungry 20 something year old males already pissed off because they can't get laid who now can't find a job.  China will be another domino that will fall after Europe and the US.  

Sun, 11/13/2011 - 21:39 | 1874455 holycrooks
holycrooks's picture

you are not correct. for 5000 years, they invented tortures and killings.

Sun, 11/13/2011 - 21:59 | 1874480 Harlequin001
Harlequin001's picture

and fireworks...

Sun, 11/13/2011 - 22:01 | 1874482 Harlequin001
Harlequin001's picture

and football...

Sun, 11/13/2011 - 22:02 | 1874484 Harlequin001
Harlequin001's picture

and what have the Roman's ever done for us, eh?

Sun, 11/13/2011 - 22:57 | 1874552 WmMcK
WmMcK's picture

Built aquifers ... and maintained peace, if I remember correctly.

Sun, 11/13/2011 - 23:01 | 1874559 Harlequin001
Harlequin001's picture

roads, sewers...

Mon, 11/14/2011 - 00:26 | 1874675 trav7777
trav7777's picture

you see that alphabet you're using?

Mon, 11/14/2011 - 01:25 | 1874779 Harlequin001
Harlequin001's picture

Roman numerals, something else consigned to the dustbin of history, just like the ECB...

Mon, 11/14/2011 - 03:02 | 1874898 Raymond Reason
Raymond Reason's picture

Catholicism

Mon, 11/14/2011 - 04:18 | 1874941 Harlequin001
Harlequin001's picture

I was going to say 'Bollocks' but when you think about it, without Romans there would be no Catholics, and Jesus would merely have been just another unremarkable king of a displaced tribe of what were arguably some of the oldest and best trained fighters in the world at that time...

Next to the Romans of course, who whooped their arses...

Mon, 11/14/2011 - 03:21 | 1874906 fajensen
fajensen's picture

That's how China writes off debt. It just disappears one night. Like dissidents.

Sun, 11/13/2011 - 20:04 | 1874300 knukles
knukles's picture

Yawn

 

(Why do I feel like I keep talking to myself?  Every fucking thing is absolutely broken, nothing works, the math don't add, the cows don't crow when Venus occults with Mars during a momentary stutter in the precessional rotation.  And all the politicians lie, dogs and cats are happily having guppies and if the Mexicans get thrown out of California strawberries will cost more than premium gasoline.  The shit from Japan is floating onto shore, Merkel, Snarko and their ilk are fucking everything up, Goldman (at the behest of the City of London, BTW) is running everything, my checks bounce, my feet hurt and the Lord don't love me anymore.  And i'm the only one yelling we're fucked in real time, not tomorrow, or later, but right now, here, where we sit and stand.  And nobody liistens.)

Sun, 11/13/2011 - 20:28 | 1874336 hedgeless_horseman
hedgeless_horseman's picture

I hear you.  Start with your relation with the Lord.  Hear tell, it is the easiest of all those very broken things to repair, because you have the most control over it.  First, love the Lord with all your heart.  Second, love your neighbor.  That is pretty much it.

Sun, 11/13/2011 - 20:49 | 1874384 Michael
Michael's picture

Let me add to that;

Every human is in possession of a soul or to be more specific, a spiritual life force.

The purpose of this spirit is to become worthy of re-joining with the creator.

The purpose of man is to become as God IS.

Many will not qualify to return home.

The pursuit of lust, greed, and power disqualify you and your light is extinguished in the end. Hell is not an option for people, only eternal death.

The demon possessed know this. 

Sun, 11/13/2011 - 22:02 | 1874487 Harlequin001
Harlequin001's picture

Bollocks.

Sun, 11/13/2011 - 22:31 | 1874517 Michael
Michael's picture
1. Harlequin A conventional buffoon of the commedia dell'arte, traditionally presented in a mask and parti-colored tights. 2. A clown; a buffoon. [Obsolete French, from Old French Herlequin, Hellequin, a demon, perhaps from Middle English *Herleking, from Old English Herla cyning, King Herla, a mythical figure identified with Woden.] Need I say more?
Sun, 11/13/2011 - 22:39 | 1874525 Harlequin001
Harlequin001's picture

Yes, and perhaps you could include something of relevance...

and perhaps a little more accurate.

Mon, 11/14/2011 - 03:06 | 1874899 Raymond Reason
Raymond Reason's picture

How about son of a motherless goat?

Mon, 11/14/2011 - 04:38 | 1874949 Harlequin001
Harlequin001's picture

Eh, what is?

Sun, 11/13/2011 - 21:20 | 1874432 High Plains Drifter
High Plains Drifter's picture

if trav was your neighbor, would you love him.........:)     ooooooooooooohhhhhhhhhh noooooooooooo.....

Mon, 11/14/2011 - 05:58 | 1874982 Dugald
Dugald's picture

Cuz, you go roun luvin yers neighbors and yew cud jist hev a sitooatshun or more, dig? Is yew real randy or jist a talkin?

Sun, 11/13/2011 - 19:58 | 1874305 FL_Conservative
FL_Conservative's picture

I guess manipulating economic statistics is another thing that they learned from our government.

Sun, 11/13/2011 - 19:59 | 1874307 trav7777
trav7777's picture

yes, even things other people do on their own are our fault.

Piece of shit self-hating whitey

Sun, 11/13/2011 - 20:28 | 1874350 Schmuck Raker
Schmuck Raker's picture

I think we can all safely agree this is due to Jewish influence over the Pentagon IG (DoDIG ODIG-AUD). DUH.

Sun, 11/13/2011 - 22:04 | 1874489 Harlequin001
Harlequin001's picture

No, I don't think we can...

Mon, 11/14/2011 - 08:35 | 1875125 FL_Conservative
FL_Conservative's picture

Hey dumbass, I don't hate myself or the US.  Quite the opposite.  But I think that most politicians are as crooked as a hockey stick.  So I recognize that when their lips are moving, a lie most likely is coming my way, which includes the manipulated statistics that they want me to believe.  By the way, bigot much?????

Sun, 11/13/2011 - 20:00 | 1874312 midtowng
midtowng's picture

I just don't understand how you can't take the Chinese government's word for it. They've always been so trustworthy.

Sun, 11/13/2011 - 23:00 | 1874558 TheFourthStooge-ing
TheFourthStooge-ing's picture

Their investment advisor is Angero Mozirro.

 

Sun, 11/13/2011 - 20:05 | 1874317 Oswald Spengler
Oswald Spengler's picture

A Jew and a Chinaman were in a bar together, The Jew brought up the subject of Pearl Harbour, reprimanding the Chinaman for the disgraceful role his country had played. He protested vehemently, pointing out that the raid had been mad by the Japanese.
"Japanese, Chinese, they are all the same to me!" said the Jew.
Pretty soon the Chinaman fellow started talking about the tragic sinking of the Titanic, asking the Jew if he didn't feel guilty about sinking it.
"Hey, wait a minute," replied the Jew, "The Jews didn't have anything to do with the Titanic sinking, it was an iceberg!"
"Iceberg, Goldberg," said the Chinaman, "They're all the same to me!

Sun, 11/13/2011 - 20:31 | 1874353 knukles
knukles's picture

A banker, a GM worker and an unemployed person are sitting around a plate of 12 biscuits. The banker stands up, pockets 11 biscuits and on the way out to his chauffered Mercedes limo says:

"Yo, Mr. Goodnut, look out or that welfare scrounger will steal your biscuit"

Mon, 11/14/2011 - 03:12 | 1874904 Raymond Reason
Raymond Reason's picture

Okay.  One-liner. 

Two horses walk into a saloon, belly up to the bar, bartender says: "Hey guys.  Why the long faces?" 

Sun, 11/13/2011 - 20:22 | 1874342 Fazzie
Fazzie's picture

 China is the go-to supposed economic miracle that CNBC loves to tout when things get gloomy in the west. I supposed it never crossed their minds that a totaliarian Commie regime  that dosent think twice about tortuing and killing its own citizens would maybe, just maybe fudge just a tiny little bit on the economic data since it isnt like they would let you double check them.

 Nope, all Chinese data is to be taken at face value.  When the hard landing comes it will be yet another "nobody, I mean nobody could have seen that coming" story. Not a whisper of the fringe lunatic blogs that called it correctly.

 

Mon, 11/14/2011 - 03:32 | 1874912 fajensen
fajensen's picture

It's New Management: Only the numbers ... well numbers are too complicated and stuff ... so Only the KPI's Matter. Being "a result oriented leader" means dedicating all ressources to generating the exact combination of KPI's that releases The Bonus. I bet the Chinese learned that lesson good at Harward. 

 

PS:

Journalist are becoming retarded lapdogs. They write up whatever Reuters tell them and even the press releases they are given count as News. The latest scandal here in the DK is that apparently we helped turning our part of Afghanistan into a shithole too. Wee, What A "Surprise": Anyone lazy enough to be drinking some beers with their sons friends coming back from Afghanistan (or Kosovo for that matter) would be hearing some really terrible stories that are not in the "News".

Sun, 11/13/2011 - 20:23 | 1874343 slewie the pi-rat
slewie the pi-rat's picture

pre-report haircut

Sun, 11/13/2011 - 22:24 | 1874509 slewie the pi-rat
slewie the pi-rat's picture

on a per capita basis, it is probably less than food-stamps-4-a-day/US troll

if the chinese run into trouble on their muni debt, we'll swap them for fanny & freddie debt and bail them out

fade that, pimpco!

Sun, 11/13/2011 - 20:32 | 1874357 reader2010
reader2010's picture

slo motion train wreck...messed up, locked up and fucked up.

Sun, 11/13/2011 - 20:32 | 1874358 chump666
chump666's picture

Ah China, and their local councils debt loaded overkill... think of it like  5x Italy's all crammed into the China mainland i.e provinces. All mega tons of debt ready to implode.  Nasty. 

Get ready for volatility, bust those tight equity ranges - momo profit taking goes hysterical, Italy 10yr spike again, EUR sell and panic restarts.

Mon, 11/14/2011 - 00:31 | 1874686 trav7777
trav7777's picture

don't worry, there's plenty of cheap yuan ready at the printer just like in the Song dynasty when the devious orientals hatched their million year plan for world domination.  The second prong of this was getting addicted to opium and giving swaths of land to the British

Mon, 11/14/2011 - 00:41 | 1874709 jekyll island
jekyll island's picture

The Chinese accountants perform about as well as Gov. Perry at a debate.  What's the over under on the renmibi becoming the next world reserve currency? 

Sun, 11/13/2011 - 20:38 | 1874367 Elwood P Suggins
Elwood P Suggins's picture

Ah so!!!!!!!!!!!!!!!

Sun, 11/13/2011 - 21:03 | 1874408 Mark123
Mark123's picture

"Duyang town in Guangdong province has >200m yuan of debt vs annual fiscal income of 500,000 yuan"....wow....is this correct???????????????

 

So this town has a slight problem (probrem).  This is lke the Federal Govt having a debtload or 1,000 trillion! 

 

Keep building more factories and shopping centers and luxury condos you dumb shits....that will solve your problems.  And everyone thinks China has a boatload of cash to save the world with.

Sun, 11/13/2011 - 22:06 | 1874491 Harlequin001
Harlequin001's picture

'And everyone thinks China has a boatload of cash to save the world with.' - They have, and more than you can imagine...

Sun, 11/13/2011 - 22:38 | 1874528 Mark123
Mark123's picture

What exactly are you smoking?  It must be good.

Sun, 11/13/2011 - 22:59 | 1874556 Harlequin001
Harlequin001's picture

Hmmm, have you been reading the news recently? Where do you think all this money for the EFSF/Fed bailouts is coming from? How do you think the CIC is funded? The money printing hasn't started yet and I can assure you that China has no shortage of it.

Congratulations Mark, you are about to become a millionaire, whether you like it or not...

Mon, 11/14/2011 - 07:53 | 1875075 jcaz
jcaz's picture

LOL- yeah, that's why they keep loading up on US Treasuries that pay them nothing......

China is in no position to dictate terms, which is exactly what is pissing them off......

Mon, 11/14/2011 - 03:39 | 1874915 fajensen
fajensen's picture

China does not care about "the world", China at the most cares about China.

There is no way that a Chinese would be helping the competition. The lot in power now would have watched at least some of the 20-40 million starving to death right in their own country, it will be tattooed on their frontal lobes that you keep what you have or you, and your entire family too, might starve.

Sun, 11/13/2011 - 21:07 | 1874413 ziggy59
ziggy59's picture

That's the difference between Asia and Europe. China admits to more debt, and Europe finds missing money. Incredible doesn't describe it.

Sun, 11/13/2011 - 21:23 | 1874434 monopoly
monopoly's picture

Oh Tyler, you are so picky. Here, let me print that amount for you. 

Done!

Sun, 11/13/2011 - 21:36 | 1874449 holycrooks
holycrooks's picture

CDS, MBS, are thing of the past.

Now we have "chinese accounting".

Sun, 11/13/2011 - 22:56 | 1874551 TheFourthStooge-ing
TheFourthStooge-ing's picture

holycrooks opined:

CDS, MBS, are thing of the past.

Now we have "chinese accounting".

Is it really chinese if they were just trying to copy MERS?

 

Sun, 11/13/2011 - 21:37 | 1874452 topcallingtroll
topcallingtroll's picture

Talk about kicking the can.

China has been built on borrowed money pyramided on more borrowed money. Their finances are so opaque at their central bank they could be monetizing trillions of yuan every few years and we woyldnt know. On Wikileaks a cable from an american diplomat reported that a chinese government official acknowledged that none of their growth and inflation statistics are to be trusted.

And they seriously think we would consider including their currency in the SDR?

Mon, 11/14/2011 - 03:42 | 1874919 fajensen
fajensen's picture

And they seriously think we would consider including their currency in the SDR?

If it helps more looting and more leverage, sure "we" would! You know that too!!

Sun, 11/13/2011 - 21:39 | 1874456 Stud Duck
Stud Duck's picture

The Red Guard will audit the books soon, then  we will see how they balance, with severed heads of one side and liabilities on the other.  Asso, I see said the Chinese General/Banker/Developer as he emegrates to Argentina and goes into cattle farming.

Sun, 11/13/2011 - 21:39 | 1874457 Stud Duck
Stud Duck's picture

The Red Guard will audit the books soon, then  we will see how they balance, with severed heads of one side and liabilities on the other.  Asso, I see said the Chinese General/Banker/Developer as he emegrates to Argentina and goes into cattle farming.

Sun, 11/13/2011 - 21:54 | 1874472 Dollar Bill Hiccup
Dollar Bill Hiccup's picture

I heard a rumor that the CCP had bought the US Government and was going to do a reverse merger and list it on the NYSE ...

Sun, 11/13/2011 - 21:58 | 1874479 CitizenPete
CitizenPete's picture

They may have just borrowed a page from Washington.

Sun, 11/13/2011 - 22:33 | 1874520 americanspirit
americanspirit's picture

It also seems that they forgot to put enough fuel in that marvellous new jet fighter plane, and of course there were those seals left out of the propeller shafts on that river cruise ship, so what a couple of hundred billion here and there - they're so rich and powerful that attention to details isn't actually required.

Sun, 11/13/2011 - 22:34 | 1874521 americanspirit
americanspirit's picture

It also seems that they forgot to put enough fuel in that marvellous new jet fighter plane, and of course there were those seals left out of the propeller shafts on that river cruise ship, so whats a couple of hundred billion here and there - they're so rich and powerful that attention to details isn't actually required.

Sun, 11/13/2011 - 22:35 | 1874522 Mark123
Mark123's picture

Europe/America - "China, give us your savings to invest in our latest fiat ponzi scheme"

 

China - "no thanks, we have a better fiat ponzi scheme in our own country"

 

God - "why did I create this mess...time to pull the plug...now where is my Mayan calendar?"

Sun, 11/13/2011 - 22:45 | 1874535 moskov
moskov's picture

Are you talking shit here? What does Europe and America have to compare with China? Your bloody debt problem is the worst kind in the history of mankind and you are still running a trade deficit. What a joke

Mon, 11/14/2011 - 03:49 | 1874925 fajensen
fajensen's picture

The joke is entirely on you.

"You" are the one giving real goods and services away in exchange for mere paper - actually not even real paper but bits - so it can be produced in infinite amounts at almost zero costs. Why should one not run the largest deficit possible and then default? What would you lot do about it?? Nothing!

Sun, 11/13/2011 - 22:36 | 1874523 americanspirit
americanspirit's picture

sorry - double post.

Sun, 11/13/2011 - 22:43 | 1874533 chinaguy
chinaguy's picture

LOL - "these are not the droids you are looking for" ......

But why oh why, does the MSM give this "story" the slightest, slightest, slightest...bit of coverage....

...cause China owns their access & they are ALL whores.

 

Sun, 11/13/2011 - 23:41 | 1874622 PulauHantu29
PulauHantu29's picture

Is this $3Trill RMB seasonally adjusted?

Mon, 11/14/2011 - 00:24 | 1874670 DarkStarDog
DarkStarDog's picture

I just wanna know where all the white women be at...

Mon, 11/14/2011 - 00:32 | 1874690 chump666
chump666's picture

China is most likely crashing now.  Tuff situation for them, oil inflation and a rapidly slowing economy.   Give them another 3mths then a full blown crash.

The world will face a depression that will be historic.  Europe as an economy will be wiped off the map.

As for China helping Europe? That is bull sh*t and the ESFS fund is a zombie, China for the most is keeping the EUR bid, till they sell a ton.  That's it.  Our global economic wipe-out is now being counted down.

Mon, 11/14/2011 - 02:41 | 1874882 quacker
quacker's picture

Damned hooked-nosed Chu's.

Mon, 11/14/2011 - 07:33 | 1875057 RemiG2010
RemiG2010's picture

In the long term Chinese have even bigger problem than all the of balance-sheet debt, that is the size of population and monolithic, inflexible political structure. US and especially political lack of cohesion in EU, plus national diversity may seem to be a negative at first look, but in the long run it is great advantage.

Mon, 11/14/2011 - 07:47 | 1875070 awkward squad
awkward squad's picture
"...national diversity may seem to be a negative at first look, but in the long run it is great advantage."

You only say that because you're black, Remi. You might want to get that afro cut and smarten up a bit before you posit yourself as any kind of 'great advantage'.

Mon, 11/14/2011 - 08:09 | 1875086 RemiG2010
RemiG2010's picture

"You only say that because you're black, Remi."

Check again in your crystal ball and tell me what you see!

Do NOT follow this link or you will be banned from the site!