Another Chinese city admits ‘fake’ economic data

Chinese provinces and cities have long been suspected of cooking up numbers, with the focus on local government officials, whose performance are often assessed based on how well their respective economies have performed

By: Reuters | Beijing | Published: January 17, 2018 2:03:32 pm
Another Chinese city admits 'fake' economic data In an agenda-setting Communist Party Congress in October, President Xi Jinping said China has now entered a “new era” where the country will prize quality growth over quantity. (AP photo)

A northern industrial city in China said its 2017 fiscal revenue was significantly less than it had earlier estimated partly due to “fake” additions, making a revision just days after reports of similar incidents fueled scepticism over official data.

Baotou in China’s Inner Mongolia Autonomous Region revised its estimated fiscal revenue in 2017 lower by nearly 50 percent in an annual work report, a copy of which was published on the Baotou government’s website on Jan. 13. The Baotou city government said in the report that the revision was due to factors including “fake additions”. It did not say how the additions came about or who was responsible.

Days earlier, the governments of Inner Mongolia and Tianjin, a large port city in northern China, said their fiscal and economic numbers for 2016 had been overstated. “We have been trying to change our mindset and change the course of our development model,” the Baotou government said while pledging to tame government borrowings in part by halting debt-burdened public projects.

Baotou was forced to halt an ambitious subway construction project earlier last year as the central government questioned its ability to finance the debt. Inner Mongolia cut its industrial output figure for 2016 by 40 percent, according to the official Xinhua news agency on Jan. 3. It also said fiscal revenue for that year ought to be 26 percent less than initially stated. It did not give details.

The 2016 gross domestic product of Tianjin’s Binhai New Area – an economic zone once touted to become China’s Manhattan – was actually about a third smaller than previously announced, according to a commentary in the official People’s Daily on Jan. 15. The incidents of data fraud coincided with a campaign led by Beijing to crackdown on risky lending, aimed partly at curbing runaway local government debt.

The People’s Daily said that while inflated data may look good on paper, it would lead to more stress in the less developed hinterland as it would cause the central government to reduce funding. In January last year, the northeastern province of Liaoning said it had faked fiscal data from 2011 to 2014, becoming the first province to make such an admission.

Chinese provinces and cities have long been suspected of cooking up numbers, with the focus on local government officials, whose performance are often assessed based on how well their respective economies have performed.

China’s top leaders signalled a shift in priority as the country strives to be more quality driven. In an agenda-setting Communist Party Congress in October, President Xi Jinping said China has now entered a “new era” where the country will prize quality growth over quantity.

China is set to release its 2017 GDP data on Thursday. Premier Li Keqiang has signalled that GDP growth should be around 6.9 percent, accelerating from a 26-year low of 6.7 percent in 2016.

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