Still believe that China's PMI is above 50 and suggesting a global growth expansion? Still believe in Santa and the Tooth Fairy? Well, none other than China's own National Bureau of Statistics has been forced to admit that at least one of its major provinces has dramatically overstated industrial output. As Sina reports, according to a NBS report, the government in China's Yunnan province had coerced local companies to report inflated industrial output value, resulting in artificially high economic figures. With government leadership promotions driven by the performance of economic numbers in each province, it should hardly be surprising but the scale of the fraud is remarkable. In 2012, one county in Yunnan province reported CNY6.34 billion in output while audits showed only CNY 2.82 billion and in the first half of 2013, Yunnan published CNY 2.75 billion in output while audits showed a mere CNY1.06 billion! The province was also found to have faked investment data.
China's National Bureau of Statistics (NBS) on Thursday announced it had uncovered a serious case involving the faking of economic data by a county government in southwest China's Yunnan Province.
According to the NBS's publicized report, the government of Luliang had coerced local companies to report inflated industrial output value, resulting in artificially high economic figures.
Twenty-eight sampled local companies reported a total of 6.34 billion yuan (1.03 billion U.S. dollars) in industrial output value in 2012; however, the actual value was only 2.82 billion yuan, based on initial calculation, according to the report.
Similarly, 25 sampled local companies reported 2.74 billion yuan of industrial output value in the first half of 2013, but the NBS initially verified the actual value to be only 1.06 billion yuan.
Meanwhile, the county was also found to have faked investment data.
Companies complained that if they did not fraudulently report higher data, their reports would be returned by local government departments. They also said that fake reports would ensure they would enjoy favorable policies such as securing bank loans.
The NBS said that the misconduct has seriously affected the authenticity and independence of company data.
The NBS did not specify the reasons behind the county's faking of data but it is a well-known fact that local government leaders are assessed for their performances based on economic data. Nice-looking data sheets mean promotion opportunities.