Chinese province admits inflating fiscal revenues

An employee walks between front-end loaders which are used to move coal imported from North Korea at Dandong port in the Chinese border city of Dandong, Liaoning province.
An employee walks between front-end loaders which are used to move coal imported from North Korea at Dandong port in the Chinese border city of Dandong, Liaoning province.PHOTO: REUTERS

Liaoning case raises fresh doubts about accuracy of China's economic figures

BEIJING • The rust-belt province of Liaoning fabricated fiscal numbers from 2011 to 2014, local officials have admitted, raising fresh doubts about the accuracy of China's economic data just days before the release of the nation's full-year growth report.

City and county governments in the north-western region committed fiscal data fraud in the period, Governor Chen Qiufa said at a meeting with provincial lawmakers on Tuesday, according to the state-run People's Daily.

Fiscal revenues were inflated by at least 20 per cent, and some other economic data was also false, the paper said, without specifying categories.

Liaoning, which has been a base for old heavy industries, reported a rare negative growth in its gross domestic product (GDP) last year, reported the South China Morning Post.

With struggling state-owned enterprises, a reluctance by both private and foreign companies to invest in the area, and an outflow of its population, the province has been dubbed China's "rust belt".

Mr Chen said the data was made up because the officials wanted to advance their careers.

NATIONWIDE PROBLEM

'GDP inflation' has become like a chronic disease - it's not unique to Liaoning alone.

STATE NEWS AGENCY XINHUA

The fraud misled the central government's judgment of Liaoning's economic status, he said, citing a report from the National Audit Office last year.

Mr Ning Jizhe, head of the National Bureau of Statistics, has said China should prevent fake economic data and increase the quality of its statistics.

Officials and analysts in China and abroad have long questioned the accuracy of Chinese economic figures, which many suspect are often manipulated to make the economy look more robust than it really is.

Even Premier Li Keqiang has expressed doubts about the accuracy of the country's GDP figures.

Leaked US diplomatic cables show that as the top official in Liaoning province in 2007, Mr Li told the then US ambassador that such data was "man-made" and thus unreliable.

" 'GDP inflation' has become like a chronic disease - it's not unique to Liaoning alone," wrote state news agency Xinhua, but even so, the province's sins were "comparatively serious".

Liaoning saw an unprecedented purge of more than 500 deputies from its legislature last year.

The deputies were implicated in vote-buying and bribery in the first provincial-level case of its kind in the Communist Party's almost seven-decade rule, according to Xinhua.

Former provincial party chief Wang Min, who led Liaoning from 2009 until 2015, was earlier expelled following corruption allegations by China's top anti-graft watchdog.

Tomorrow, China will release its official report on economic growth last year. On Monday, the country's top economic planner Xu Shaoshi said he expected to see growth of about 6.7 per cent, the slowest since 1990.

BLOOMBERG, AGENCE FRANCE-PRESSE

A version of this article appeared in the print edition of The Straits Times on January 19, 2017, with the headline 'Chinese province admits inflating fiscal revenues'. Print Edition | Subscribe