Whistleblower Forces China To Come Clean Over Data Manipulation

Whistleblower Forces China To Come Clean Over Data Manipulation (ZeroHedge, June 19, 2013):

It seems yet another conspiracy theory has become conspiracy fact thanks to a Chinese whistleblower. While the shrodinger-like nature of Chinese data has been keeping the market guessing for the last few years, the disconnects between hard-data (e.g. electricity production) and government-supplied surveys have been, at times, ridiculous (leaving aside the un-manipulated craziness of arbitrage-driven trade data). As the WSJ’s China Real-time reports, in an unusual move, the National Bureau of Statistics – clearly frustrated with the lies, damn lies – has recently outed a local government it says was involved in a particularly egregious case of number fudging, providing rare insight into just how we’re being deceived.

Via China Real-Time Report,

Figures on everything from inflation and industrial output to energy consumption and international trade often don’t seem to gel with observation and sometimes struggle to stack up when compared with other indicators.

How the figures are massaged and by whom is as much a secret as the real data itself. But in an unusual move, the National Bureau of Statistics – clearly frustrated with the lies, damn lies – has recently outed a local government it says was involved in a particularly egregious case of number fudging, providing rare insight into just how we’re being deceived.

According to a statement on the statistics bureau’s website dated June 14 (in Chinese), the economic development and technology information bureau of Henglan, a town in southern China’s Guangdong province, massively overstated the gross industrial output of large firms in the area.

An investigation by the state statistician into a sample of 73 out of a total 249 firms counted in the data found that 38 were too small to be counted as large firms and so shouldn’t have been included, and a further 19 had either stopped production, moved out of the town or otherwise ceased to exit.

The statement said that 71 companies surveyed by the statistics bureau had industrial output of 2.22 billion yuan ($362 million) in 2012 in total, but that the local government recorded it as being 8.51 billion, almost four times as much as the actual figure.

The data was supposed to be contributed by the firms themselves using an online platform. Instead, employees of the Henglan economic development bureau entered the figures themselves from their office, the statement said.

The National Bureau of Statistics said that it pursued the Henglan case on a tip from a whistleblower. How widespread the problem is elsewhere in the country is anyone’s guess.

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