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How Reliable Is Chinese Economic Data? Turns Out Multiple Provinces Have Been Fudging The Numbers

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Two Chinese provinces are under fire for false economic data, raising concerns about questionable statistics in China.

The Central Committee for Discipline Inspection (CCDI) called out Jilin and Inner Mongolia for reporting fake financial data, criticizing officials for failing to live up to the ideological standards of Chinese President Xi Jinping, according to Bloomberg News.

CCDI, a branch of the Communist Party of China, said Sunday that several regions and companies had intentionally manipulated local economic information, including data related to poverty relief funding. The anti-corruption watchdog did not provide any specific details on the false data.

Criticisms of Jilin and Inner Mongolia follow a disconcerting revelation in January that Liaoning, another northern province, has been faking its economic data for years. The governor of Liaoning province admitted that some provincial economic figures from 2011 to 2014 were fabricated, the People’s Daily reported only a few months ago.

“Many cities and counties in Liaoning province reported widespread fraudulent economic figures,” Gov. Chen Qiufa revealed at the eighth meeting of the 12th People’s Congress in Liaoning.

The problem is believed to be quite prolific. “It’s not only happening in Liaoning, but other provinces as well, as local governments are under pressure to show positive GDP figures,” Feng Liguo, a China Enterprise Confederation expert, told the Global Times.

The fake data dilemma exacerbates concerns about information on China’s economy provided by the Chinese government. For instance, the statistics always closely adhere to state growth targets, indicating surprising stability in the face of destabilizing economic practices. Chinese national development data has differed greatly in recent years from other indexes and Chinese economic indicators.

China’s growth has slowed in recent years, but provincial leaders are still under pressure to perform. The northern provinces have been under much greater stress, especially regarding heavy industries and energy. Under these conditions, Chinese officials may choose to falsify or manipulate economic data.

The Chinese government is cracking down on this data fabrication trend though. “The Chinese government has zero tolerance for any fabrication of economic data,” the state-run China Daily reported in April.

As suspicions of misconduct linger, conomists and investors often use foreign proxy indexes to analyze China’s growth rather than relying on reports from the Chinese government.

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