Red-handed: China province admits faking economic data

A Chinese official has admitted his province falsified its economic data for years, state media said on Wednesday, vindicating long-held suspicions that China has been cooking the books.

The announcement by the governor of the industrial province of Liaoning comes as the world’s second-largest economy prepares to release 2016 data that is tipped to show the slowest growth in more than a quarter of a century.

China’s Gross Domestic Product (GDP) figures are a closely watched measure of economic growth in the country, which affect business and financial decisions around the globe.

Speaking at a legislative meeting Tuesday, Liaoning’s governor Chen Qiufa admitted that from 2011 to 2014, economic data from the province’s cities and counties had been plagued with false statistics, the official Xinhua news agency said.

In 2014, it said, a central government inspection group warned Liaoning about the “prevalence of economic data fraud”.

In one 2013 case, a county reported its government revenues were 127 percent more than the actual figure, Xinhua cited the country’s top anti-graft authority and National Audit Office as saying.

Following the fraud-busting investigation, Liaoning in the first quarter of 2016 became the first province in years to report negative growth, according to reports at the time -- although it is unclear whether there is a direct connection.

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.

Chen’s statement was a rare admission of a systemic problem that is believed to plague China’s economic data reporting.

A major issue is that local bureaucrats’ promotions are tied to economic performance, giving them an incentive to falsify data in hopes of improving their chances of career advancement, Xinhua cited Chen as saying.

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