Slowly all the wheels of the legacy propaganda narrative are falling off, only this time dealing not with some ridiculous economic "recovery" tripe (for those still confused, the global economy just suffered its worst USD-denominated GDP collapse in 50 years), but with the credibility of Chinese data, which most have known is completely fabricated, only there was never an actual admission from within. Now there is.
According to China Daily [7], several local officials in China's Northeast region sought to explain dramatic economic drops in their areas by admitting they had faked economic data in the past few years to show high growth when the real numbers were much lower, Xinhua News Agency reported on Friday.
The report cited several officials in the region who acknowledged they had "significantly overstated data ranging from fiscal revenue and household income to GDP."
Three years ago Liaoning province's GDP growth was reported at 9.5 percent, but its current figure?over the first three quarters of this year?is just 2.7 percent. Jilin's growth was reported at 12 percent three years ago, but its current rate is 6.3 percent in the same period.
The revelation about the inflated figures came as the GDP growth of the three Northeast provinces ranked the lowest nationwide.
Of course, while the economy was growing, nobody cared that the numbers were absolutely ridiculous: after all, it confirmed the narrative of growth. Guan Yingmin, an official in Heilongjiang province, said local investment figures were inflated by at least 20 percent, which translates to nearly 100 billion yuan ($15.7 billion).
As a reminder, Heilongjiang province [8] is where we reported [8]recently a local coal miner, Longmay Mining Holding Group, the biggest met coal miner in Northeast China laid off a record 100,000 workers in one fine September day.
China Daily also notes that if the local financial reports were true, some single counties' GDP would have surpassed Hong Kong. An earlier audit by the National Audit Office found one county in Liaoning that reported annual fiscal revenues 127 percent higher than the actual number.
Again: as long as everyone was "growing", it didn't matter if the numbers were fabricated - in fact, the more made up the better.
Why? As a staff member in the Jilin provincial finance department, who asked not to be identified, told China Daily that in past years, local officials competed each other to lure external investment projects. They reported the promised investment value, whether it had been achieved or not, as the investment figure. So the bigger the "reported" growth, the higher the likelihood of being awarded the project, which in turn means millions in government funds being directly embezzled by corrupt local officials, money which would promptly then end up in some duplex in NYC, San Fran or Vancouver.
But why is all this emerging now? Simple: it is all the fabricated data's fault why the current growth (or rather, economic collapse) is so terrible:
"If the past data had not been inflated, the current growth figures would not show such a precipitous fall," one official was quoted as saying.
Brilliant: if only we hadn't made up ridiculously high data in the past, the comps to one, two or more years ago would not look so terrible.
What was left unsaid is that if "data had not been inflated", it would be negative and instead of 7% GDP growth we would be asking just how big China's GDP contraction will be this year.
We bring all this up in the aftermath of this weekend's "strong" Chinese industrial production and retail sales data because it too is completely fabricated and goalseeked. Only now there is no doubt.
