Turns Out China IS Lying About Everything

Tyler Durden's picture

In what may come as a shocking surprise to exactly nobody, the next great discovery as more and more layers of the global ponzi onion are exposed, is that China was, in fact, lying about everything. Yes, we know, stunning.

From the NYT:

As the Chinese economy continues to sputter, prominent corporate executives in China and Western economists say there is evidence that local and provincial officials are falsifying economic statistics to disguise the true depth of the troubles.


Record-setting mountains of excess coal have accumulated at the country’s biggest storage areas because power plants are burning less coal in the face of tumbling electricity demand. But local and provincial government officials have forced plant managers not to report to Beijing the full extent of the slowdown, power sector executives said.

Even that lonely indicator that some, even us, had considered somewhat realistic: electric output, is a mirage.

Electricity production and consumption have been considered a telltale sign of a wide variety of economic activity. They are widely viewed by foreign investors and even some Chinese officials as the gold standard for measuring what is really happening in the country’s economy, because the gathering and reporting of data in China is not considered as reliable as it is in many countries.


But an economist with ties to the agency said that officials had begun making inquiries after detecting signs that electricity numbers may have been overstated.


Another top corporate executive in China with access to electricity grid data from two provinces in east-central China that are centers of heavy industry, Shandong and Jiangsu, said that electricity consumption in both provinces had dropped more than 10 percent in May from a year earlier. Electricity consumption has also fallen in parts of western China. Yet, the economist with ties to the statistical agency said that cities and provinces across the country had reported flat or only slightly rising electricity consumption.

In other words, the chart we showed a month ago showing already collapsing Chinese power production is far, far worse in reality.

So why is everything piece of data out of China a lie (and by implication, why are all talking heads and pundits who preach the China "bull case" full of it)? One simple reason: politics.

Questions about the quality and accuracy of Chinese economic data are longstanding, but the concerns now being raised are unusual. This year is the first time since 1989 that a sharp economic slowdown has coincided with the once-a-decade changeover in the country’s top leadership.


Officials at all levels of government are under pressure to report good economic results to Beijing as they wait for promotions, demotions and transfers to cascade down from Beijing. So narrower and seemingly more obscure measures of economic activity are being falsified, according to the executives and economists.


“The government officials don’t want to see the negative,” so they tell power managers to report usage declines as zero change, said a chief executive in the power sector.

When all is said and done, the reality is that China, which according to idiotic press rumors that resurface every 2 weeks is supposed to bailout, is in a condition that is worse than even where it was after the Lehman collapse:

The question is whether the actual slowdown is even worse. Skewed government data would help explain why prices for commodities like oil, coal and copper fell heavily this spring even though official Chinese statistics show a more modest deceleration in economic activity.


Manipulation of official statistics would also provide a clue why some wholesalers of consumer goods and construction materials say sales are now as dismal as in early 2009.


Studies by Goldman Sachs and other institutions over the years have strongly suggested that Chinese statisticians smooth out the quarterly growth figures, underreporting growth during boom years and overstating growth during economic downturns.


And Chinese officials have raised questions in the past about the reliability of Chinese economic statistics. An American diplomatic cable released by WikiLeaks shows that Li Keqiang, widely expected to become premier of China this autumn, said in 2007 that he regarded China’s broad measures of economic growth as “ ‘man-made’ and therefore unreliable.”

So... let's see here: huge disparity between what is represented and what the reality is... a crucial political election... and a regime that many have accused of misreporting critical data for years (even if others captured media outlets accuse the former of being conspiracy theorists)...

Why... could this possibly mean that every piece of data out of the US is just as made up and just as meaningless? Now that would be truly unpossible.

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Jack Sheet's picture

They must have had an internship at the BLS.

Popo's picture

So... It turns out that our lying economists are now accusing their lying economists of lying. Which either means that our lying economists aren't lying or are lying.

See the problem with a disinformation war is that when both sides play there's always a stalemate.

I'd might believe that China is experiencing economic turmoil, but since our side's economic "experts" have proven beyond all microscopic measures of doubt that they are utterly full of shit -- I can't begin to attribute any credibility to this story whatsoever. If we are to believe China is in trouble, then I must also believe the countless articles from the same sources which claim we are in a "recovery".

Colombian Gringo's picture

Chicoms lying, naw never happen. Instead like EU politicians, we have to massage the truth so that the peasants cannot understand just how badly they are getting fucked.

veyron's picture

They are covering their losses with this "chinese girls dating website". I love how it showed up on the left side when I was reading this article.

Popo's picture

There's always someone on every comments page who doesn't realize that ads get served to them based on their past browser history.

Veryon, stop surfing pics of young Chinese chicks and you'll stop seeing those ads.


TrainWreck1's picture

I keep getting the ugly chick in the Microsoft CRM ads, and I've never surfed anything to do with CRM. :(

potlatch's picture

oops, sorry that was me.  I'm CRM-curious.

TruthInSunshine's picture

China = Greater-est Fool of All

Lesson:  Reality always catches up to mythology and lays the beatdown from hell upon it. Try to hedge accordingly.

I've said it all along. While the media pundits and Jim O'Neill were hyping the astounding growth in China (I'm not denying economic growth has occurred, but I am claiming it's been MASSIVELY overstated), it will turn out that China, due to fundamental nature of its political and technocratic regimes, is and has been just another paper BRIC in the wall.

Think about it:  Local officials are able to essentially completely lie to central authorities on volumes and amounts of everything from bank loans to coal inventories and anything in between. Is it any wonder that China has been the biggest source of commodity inflation (yes, bigger even than the non-federal reserve-less bank, which is quite the racketeering outfit itself)?

"Oh, China is buying all the oil! Oh, China is buying all the copper! Oh, China is buying all the platinum! Oh, China is hoarding all the 'rare earth' minerals! Oh China is buying all the iron ore! Blah blah blah blah yada yada yada!

They've been buying/hoarding SOME of these things, and to a far lesser degree than the commodity bulls want everyone to believe, and what they have been bought (and stockpiled), that's not sitting around in enormous outdoor and indoor (specially built) storage yards & facilities is enough to last them quite a few years, probably, and that's assuming they don't get an even harder landing than the projectory that they're now on.

This is why China is likely to have the most debt of any nation in the world, despite it not showing up in official statistics. It would be as if each of the 50 states in the U.S. were directed AND FINANCIALLY INCENTIVIZED to grow their economies, in order to hit rigid growth targets, and then SELF-REPORT their progress back to D.C.  Does anyone think individual states WOULD NOT grossly inflate their 'growth' numbers they report? Can you imagine the result? Yeah....you can. Just look at China.

What about those regional Chinese banks? Does anyone else think literally thousands of them would make the fomer IndyMac's balance sheet circa-2009 look good by comparison? If so, add up those numbers in CN¥. 

And about their mountain/stockpile of U.S. treasury notes that was procured using Chinese fiat printed by the PBOC, based on the, shall we say 'less than accurate' data the central economic authorities have been receiving for years now, with the data and numbers distorted and butchered to the extreme by local provincial politicians and technocrats. Think about that and the implications.

Another BRIC in the Wall Lyrics - Part 3 (Waters) 1:17

[Sound of many TV's coming on, all on different channels]
"The Bulls are already out there"
Pink: "Aaaaaaaaaaaaaaaaaaaaaaaarrrrrgh!"
"This Roman Meal bakery thought you'd like to know."

All in all it was just Jim O'Neills paper BRICs  in the wall.
All in all it was just Jim O'Neill's paper BRICs  in the wall.

And the London & New York banksters NOW warn of epic fallout.*
But Germans can't finance a PIIGS bailout.
For it would cause German living standards for generations to rot.

They don't need New York or London bankster bullshit.
They dont need Krugman's giant money pit.

German's don't need any thought control.
No more dark fiat charlatism for their nation.

For they have seen the Eurozone failed monetary union handwriting on the wall.

Hence-- they don't need any Bernanke Ponzinomics at all.
All in all it was inevitable that the bankrupt PIIGS would fall.
And in addition, so too would Jim O'Neill's paper BRICs in the wall.


HoofHearted's picture

Why do I keep getting dumb ass Cramer as my ads? And no smart ass comments about what I must be looking at. (I did use Yahoo Finance for some spreadsheets of historical quotes, so maybe Google sees me as a complete idiot.)

TruthInSunshine's picture

And to Popo, all economists, 'theirs' and 'ours,' have been lying. Lies are necessarily perpetuated to keep Ponzi schemes from unwinding.

AldousHuxley's picture

Good way to judge ethnic restaurant's quality and authenticity is to look at how many people of the said ethnicity eat there.


Given that Chinese themselves are

  • sending their children to non-Chinese universities (because of lack of creditability in Chinese schools)
  • buying homes outside of China in Canada, Australia, US (because of lack of trust in their government, economy, and pollution)
  • investing in non-Chinese companies (because they know chinese company accounting is worse than Enron's)
  • get money out of Chinese state controlled banks even for state officials (because they know Chinese long term growth is unsustainable)
  • purchase foreign cars, goods (because they know what kind of shitty quality product they produce by cutting corners)


US is not that much better. Americans are just better liars.

  • US banks are insolvent; get money out of US banks and into swiss bank accounts 
  • buying homes in tax shelter countries like bahamas
  • purchase foreign cars, goods (because not much is made in america anymore)
  • investing in emerging economies (because they know state sponsored slavery is profittable)


francis_sawyer's picture

I guess the only TRULY honest people in the world are the jews...

Vampyroteuthis infernalis's picture

Ahhh yes, the incredible imploding authoritarian gov't. It is a repeat of 1991. In a few months, China will come forth and say we are broke. A few weeks after that, the system will collapse. Knowing China's history, it will be most likely a violent manner.

AldousHuxley's picture

maybe the elder  Orthodox Jews protesting against zionism for using Jews...


but definitely not the hollywood jews in SHOW biz where lies are spun as reality...

definitely not the wall st. jews where scams are spun as creditability....

definitely not the political elite dual citizen jews where being subjugated by pro-Israel  lobby is spun as pro-American.


one example of honest Jew: Jewish grandmother in Israel challenging Jewishness of American Jews





Michael's picture

There's nothing in the known universe that can stop the Chinese mega supper housing bubble from popping.

Everyone should know how they play their scam placing a stranglehold on the rest of society.

Defamation True Stories should be shown in every classroom.

True Stories - Defamation (2010)



blunderdog's picture

It's easy to mix up "Judaism," which is a religious tradition, with "Jewishness," which is an ethnicity.

Most American Christians aren't Christian, either.

Prince Eugene of Savoy's picture

That video is excrement.  If the self-loathing producer has never experienced anti-Semitism, then take a journey to Gaza or Egypt.  The Palestinian homeland is in Jordan.

AldousHuxley's picture

that's what hitler said about the Zoos.


Zoos' homeland is somewhere else other than Germany.


It is politician's job to divide and conquer and create fake enemies to achieve his own agenda.

When 99% Jews get together with 99% palestinians , 1% elites in each group will no longer have the power.

mjk0259's picture

I think the main reason Chinese go to non-Chinese universities is you have to be smart to go in China. US will take anyone with money. As an aside, how can Chinese who are supposed to make $200/month pay for US colleges when American's increasingly can not. Doesn't add up. It's not just the Chinese top 1% sending their kids overseas.


AldousHuxley's picture

China has 1.4 billion people.

1% of that is 14,000,000 people


Elites in China are richer than in western countries due to worse income distribution curve.


Chinese middle class income range is NOT $200/month....$10,000 ~ $60,000  / year.....not that bad compared to US given much cheaper cost of living.


Wake up. Chinese are getting richer. Middle class in China is already richer than dumbass republican voting rednecks in the south.


Hopeless for Change's picture

Next time, wait until you have a valid point before posting.  Or at least wait until the quaaludes wear off.

strangewalk's picture

1.4 billion is another suspect statistic. In Hong Kong everyone cites China's true population as closer to 2 billion, as have several independent demographic studies. Chinese monitors under report numbers to make themselves look good, and higher level officials want to portray a favorable picture to the outside, as if their policies are working (they're not). I live in China and you're right, the middle class here has a standard of living on par with the US. However, China's middle class only comprises about 20% of the population, a number that is still larger than the entire population of the US.    

Arnold Ziffel's picture

"The grass is greener on the other side."

"College prep" programs are Big Bucks in China....Not to mention the heavy recruiting by American colleges to get full-pay students instead of local deadbeats. 

I also agree with above: the very top students in China still go to:

1. Tsinghua University; or

2. Renmin Univeristy (People's University).

These two have close realtionships with Standford, Harvard and Yale with many exchange programs, visting professorships, etc.

However......There is no substitute for a hard working ambitious student no matter which uni he attends. The students who have money (but not glowing grades/IQs) may  seek costly programs in the States or Australia. Additionally, it's  Fad now to go abreaod just as it used to be here for students to attend the Sorbonne (for example).

But lets not lose sight of the fact that over 50% of the Chinese live on $1 a day. Powerful; progress the last decade or two, but overall, it's still a poor country.

That's my 2 cents.

lasvegaspersona's picture

I visit China once sometimes twice a year...just as a tourist. There can be little doubt China is humming. But like Las Vegas, even with shitty numbers in housing and employment I still have to wait in line at restaurants. This 'downturn' is definitely hitting some more than others. 

TruthInSunshine's picture

I use to visit Las Vegas twice a year, and you wouldn't believe how active/frenzied/rock'n'rollin' that city was, in terms of overall economic activity, and in terms of commercial and residential building, in what seemed like a literal land of milk & honey, right up to very point the whole house of cards began to quickly topple - starting in 2006 (though the media wouldn't report on this until VERY late 2007).

Ahhh, I still remember the ICSC convention headcount/attendee list dropping by 65% in 2008 from that of a year earlier.

AldousHuxley's picture

dumbasses who saw their shitty ghetto shack rise in value gambled it away in Vegas believing that somehow they are rich.


Vegas depends on fools like wall st. You can't beat a rigged game in the long run.

DaveyJones's picture

so true

and water and air conditioning is not getting cheaper

Burticus's picture

Hey, where's all the banner ads with the Chinque teen hotties saying, "You come my hooch I show you good time GI" and "Easy GI, you so beeeg!"  I only see ads for gold and about the only gold I ever buy is jewelry for the wife, girlfriend and daughter.

Silver, you ask?  What silver?!

As for the No. 1 financial blog on the planet, Zero Hedge, calling the obvious in advance again and the Chinque oligarchs getting caught with their hummingbird-like schlongs in their own lying mouths again:  "Act surprised."

Always good copycats, they have obviously learned well from their Western counterparts.

potlatch's picture

wow.  wife and girlfriend.  big man.

Bananamerican's picture

"man with GI schlong often have hummingbird for brain"

-ancient Chinque proverb

Cathartes Aura's picture

it's the internets people, everyone has a big dick, monster boxes of gold, and is posting from their private island, surrounded by nubile teens.

back to your fairytales. . .

DaveyJones's picture

almost Cath, it's a monster dick and a big box of gold 

and all the teens are at least nineteen 


Cathartes Aura's picture

heh, posting between Davey & 4thStooging,

trust you both to have a uniquely witty variant on the meme!

TheFourthStooge-ing's picture

Cathartes Aura said:

it's the internets people, everyone has a big dick, monster boxes of gold, and is posting from their private island, surrounded by nubile teens.

I'm posting from Ohio, have a monster box of .22 shells, and am surrounded by a pair of cats (but only at feeding time).

Everything else is true, though.  ;)

FrankDrakman's picture

Can I come to your place next weekend?

RockyRacoon's picture

If he's from the right area of the Ozarks, the wife/girlfriend/daughter could all be the same person.

cbxer55's picture

LOL!! Likely none of them have any teeth either.  ;-)

RockyRacoon's picture

All the better for... well, you know.

Calmyourself's picture

Don't listen to POPO here, not every ad is tailored depends on what you're running and its configuration..  Frankly if that were the case the only ad's I would see would be gold, silver, ammo and knot tying courses..

veyron's picture

I suspect ads are linked to content if there's not enough history in your google cache (I perpetually run in Private Browsing mode) for them to present a meaningful ad.  In this case chinese -> chinese girls 

cbxer55's picture

I get Crammer ads, I've never had any interest in that ass-clown whatsoever. I get ads for the young chicks with the "established gentlemen" as well, never ever browsed anything related to that. 

So I call bulls--t to your rant.

ugmug's picture

I get pleas for help from Chinese factory workers spitting out iPads endlessly hour after hour.



old naughty's picture


You are not paying enuff attention. China is lying, alongside our politicans and econmists. Those girls aren't lying. They're just lay-ing on the left field.

Seer's picture

I have to laugh at the emphasis on "politicians," like only THEY have a claim on this kind of "falsification?"  Calling Bernie Madoff...  calling Jamie Dimon... calling....

ALL POWER LIES (POWER _IS_ A LIE!).  WTF is it so hard for people to get this point?

mick_richfield's picture

If the Powers lie to us, it means that they think we are not powerless.

It means they're worried about what we might be able to do.

neptunium's picture

China is the elephant in the room, everyone's aware of the size of their realestate bubble they're in, everyone's aware how indebted their regional governments are, everyone's aware that their factories are idling.

Everyone knows that the CCP will do everything they can to delay the inevitable crunch, that talking about "soft landings" is essentially bullshit in a country where tens or even hundreds of millions of increasingly militant workers are likely to be laid off in the next two years.  

The longer it takes for reality to dawn to the markets the larger the "implosion" would be, what is the west's current banking exposure to the "Tiger Economy" surely if anything deserves to be called out as a global ponzi it's the PRC's "miraculous" era of continual double digit growth. 

How can the PRC maintain an environment of growth when factories are empty, the property and construction markets have collapsed, their regional governments are bankrupt and their major banks (and ours) look set to soon be insolvent. 

It's going to make the Euro crisis seem relatively trivial because the entire world is exposed via investments or dependent as producers. The Aussies and BRICS might want to start panicking right about now.



Rainman's picture

" Under Chinese law, manufacturing fake data is not a crime, but leaking it is . ".....Larry Lang ( my personal favorite quote : " Every province of China is Greece ")


reader2010's picture

Easy. Beijing will need to start a war and bomb their own cities into shitty pieces, and restart the building boom all over again. 

michael_engineer's picture

See comments on preserving infrastructure as being paramount here: