It has long been suspected but never proven. Now Liaoning Province, in the rust belt of northern China, has admitted to faking its economic growth data. The fabrication occurred between 2011 and 2014, the provincial Governor Chen Qiufa told a meeting of the local legislature.
But as is often the case in China, the Communist Party did not say by how much the data had been over-stated, although it said fiscal revenue was inflated by as much as 20 per cent in some years.
More tellingly there has been no pledge to restate the numbers for that four year period in either provincial or national accounts.
The revelation will give further voice to the China bears, even though Liaoning was considered something of a renegade province which has been hit by major corruption and vote buying scandals in recent months.
But the timing could not be worse given China's full-year GDP numbers will be released on Friday.
These are set to be equally questionable, as in each of the first three quarters China's economy grew at exactly 6.7 per cent.
Implausible numbers
That an $US11 trillion economy which is being buffeted by weak global trade, the strong US dollar and tepid domestic demand would not deviated by a single percentage point in nine months seems implausible.
And in his speech to the World Economic Forum on Tuesday, President Xi Jinping indicated full year growth would also come in at 6.7 per cent – indicating the fourth quarter number will be very similar to the previous three quarters.
That China's economic data is not entirely accurate is hardly a new theme – in 2012 the sum of all provincial GDP was 5.76 trillion ($1.1 trillion) greater than the national figure.
But despite such anomalies most analysts believed the national GDP figures showed the general trajectory of the economy.
This notion is now under threat.
More at http://www.afr.com/news/world/china-admits-its-gdp-data-is-fake-20170119-gtuh42
But as is often the case in China, the Communist Party did not say by how much the data had been over-stated, although it said fiscal revenue was inflated by as much as 20 per cent in some years.
More tellingly there has been no pledge to restate the numbers for that four year period in either provincial or national accounts.
The revelation will give further voice to the China bears, even though Liaoning was considered something of a renegade province which has been hit by major corruption and vote buying scandals in recent months.
But the timing could not be worse given China's full-year GDP numbers will be released on Friday.
These are set to be equally questionable, as in each of the first three quarters China's economy grew at exactly 6.7 per cent.
Implausible numbers
That an $US11 trillion economy which is being buffeted by weak global trade, the strong US dollar and tepid domestic demand would not deviated by a single percentage point in nine months seems implausible.
And in his speech to the World Economic Forum on Tuesday, President Xi Jinping indicated full year growth would also come in at 6.7 per cent – indicating the fourth quarter number will be very similar to the previous three quarters.
That China's economic data is not entirely accurate is hardly a new theme – in 2012 the sum of all provincial GDP was 5.76 trillion ($1.1 trillion) greater than the national figure.
But despite such anomalies most analysts believed the national GDP figures showed the general trajectory of the economy.
This notion is now under threat.
More at http://www.afr.com/news/world/china-admits-its-gdp-data-is-fake-20170119-gtuh42
