China’s Local Authorities Warn Over Fabricating Statistics

China’s statistics authority has issued a fresh warning to local authorities over fabricating statistics and intervening in data gathering to overinflate performance as part of a latest bid to improve data accuracy and help refine Beijing’s economic decision-making.

The National Bureau of Statistics said some regions in Guizhou province had falsified data, while county governments in Shaanxi province had intervened in data gathering.

The bureau inspected several provinces in summer amid an effort to improve data accuracy, while another round of visits started earlier last month.

The National Bureau of Statistics (NBS), indicated that some regions in the southwestern province of Guizhou were still falsifying data, while it said that some county governments in the northwestern Shaanxi province had intervened in data gathering.

But the bureau did not provide names and the data involved, or reveal any punishments, according to two statements published on its website. Analysts have long been concerned over the accuracy and authenticity of China’s data, as well as a lack of transparency, while internally, Beijing needs reliable figures to guide its policy direction.

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The bureau inspected several provinces in summer, including Hebei, Heilongjiang, Henan, Hunan, Guizhou and Shaanxi, to ensure raw economic data was being gleaned from genuine businesses and had not been inflated by officials.

A new round of visits started earlier last month, with another six provinces as well as the Ministry of Commerce and the Ministry of Natural Resources inspected.

A twice-a-decade nationwide economic census of businesses and households has also started, which is hoped would provide information on the post-Covid landscape as well as highlight the losses businesses suffered due to China’s zero-Covid policy.

“Data reliability is fundamentally important for rational policymaking, as well as for business decision-making,” a chair professor of finance at the University of Hong Kong, Chen Zhiwu said  “It’s definitely in the government’s interest to ensure maximum data reliability.”

Local officials tend to inflate economic figures to boost their promotion prospects or because they are under pressure to meet economic growth targets. The widening local government debt crisis has also led to increased efforts to falsify data.

In a rare move in October, the Standing Committee of the National People’s Congress warned some asset quality data at small and medium-sized financial institutions did not “truly reflect the actual situation”.

Beijing has previously punished officials and overhauled data collection and reporting systems, including centralised data preparation and announcements at state and provincial levels. Chen at the University of Hong Kong said a structural way would be to make the statistics bureaus independent of political interference. “This is doable if Beijing is really serious about rational policymaking,” he added.