Bloomberg News

Chinese Officials Falsify Data to Mask Slowdown, NYT Says

June 23, 2012

Some Chinese economic indicators are being inflated by roughly 1 or 2 percentage points as local officials falsify statistics to mask the extent of the nation’s slowdown, the New York Times reported, citing company executives in China and Western economists.

Government officials in some cities and provinces are overstating economic output, tax receipts, corporate revenue and profits, the paper said, citing executives and economists who requested anonymity for fear of jeopardizing their relationships with Chinese authorities. They are urging companies to keep separate sets of books, showing improving business results and tax payments that do not exist, the newspaper said.

Power plant managers have been told not to report the full extent of the slowdown in electricity demand, according to the report.

The Beijing-based National Bureau of Statistics, which compiles most of the country’s economic statistics, denied that economic data was overstated, the paper said. “This is not rooted in evidence,” it quoted an unnamed spokeswoman as saying.

An economist with ties to the bureau said officials began making inquiries after detecting signs that electricity output numbers may have been overstated, the paper reported. Government officials, who didn’t want to see negative growth, told power managers to report usage declines as zero change, a chief executive in the power industry who wasn’t identified was cited as saying.

Electricity consumption in eastern China’s Shandong and Jiangsu provinces dropped more than 10 percent from a year earlier in May, the newspaper said, citing a company executive with access to grid data from the provinces.

Jonathan Sinton, a China energy specialist at the International Energy Agency, told the newspaper he hadn’t heard of false data in the electricity sector. He doubted it would be feasible at the five biggest generating companies that together produce half of China’s power. If there were a problem it would be at smaller producers, he was cited as saying.

To contact Bloomberg News staff for this story: Nerys Avery in Beijing at navery2@bloomberg.net

To contact the editor responsible for this story: Jim McDonald at jmcdonald8@bloomberg.net


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