Recently, Chinese state media CCTV revealed serious exaggeration of investment attraction data in multiple areas in Henan province. For instance, Wuyang County reported 78 billion yuan of external funds, but only around 1 billion yuan was actually verified, exaggerating the figures by over 70 times.
Experts pointed out that the revelation by state media is not a genuine anti-corruption move but rather a strategy by the central government to “control a potential explosion of issues” related to economic indicators, reclaim data statistical authority, and prevent a collapse of financial credibility. The deep-rooted issue of fabrication lies in the systemic problem within the CCP where officials inflate statistics to boost their image.
According to a report by CCTV on April 8, certain regions in Henan province exhibited clear signs of data padding in investment attraction statistics. In the case of Wuyang County in Luohe City, the reported “external funds” for the first 11 months of 2025 amounted to 78 billion yuan, yet only about 1 billion yuan of relevant documentation could be provided, indicating a huge discrepancy.
The report cited admissions from local commerce departments that most data sources lacked written evidence, relying solely on phone calls to collect enterprise statistics. For instance, an investment of 58 billion yuan was accounted for but actually came from local enterprise internal fund operations, not meeting the criteria of “external funds.” Additionally, some projects failed to provide bank statements or third-party evaluations.
Similar problems were found in other regions as well. An investment in Zhengzhou’s Guancheng District recorded as 960 million yuan was acknowledged by a company executive to likely never materialize; while Zhecheng County in Shangqiu was also accused of exaggerating funds by several billion yuan.
The report highlighted the lack of verification mechanisms at various levels, from enterprise reporting, local aggregation, to subsequent hierarchical reporting, forming a chain of “amplifying data.”
Local officials admitted to escalating investment targets in investment attraction indicators. Annual growth targets are set by Henan provincial departments for lower levels, with some grassroots officials stating the need to fulfill escalating missions even when “the base data is already inflated.”
According to experts, the intricate web of data fabrication is fueled by pressure from the assessment system at every level.
Jing Peng, the Deputy Director of the Henan Provincial Department of Commerce, admitted that targets are set annually towards lower municipal levels, with growth requests of “basically 2% to 3% or even higher every year, which objectively creates pressure on the grassroots.”
Su Ling’en, Deputy Director of the Commerce Bureau in Guancheng District, also explained, “The province sets targets for each municipality, and the municipality sets targets for us… they do not look at whether the actual completion is achieved but at your completion figures.”
The interplay between this assessment structure and data fabrication did not surprise experts. Wang He remarked, “Officials produce figures, and figures produce officials. This systemic issue within the CCP cannot be easily resolved.” He noted that authorities have attempted to address this problem for years through various statistical reforms, but have only made cosmetic changes.
Davy J. Wong analyzed from the angle of incentive structures, highlighting that promotions within the CCP rely not on genuine abilities but often on manipulated data such as GDP, fixed investments, and tax revenues. He mentioned that officials promoted based on loyalty rather than merit rely on falsifying data to maintain their political lives and progress upwards in their careers.
Wong explained that the exponential exaggeration of fabricated figures can be attributed to a “structural amplifier effect,” where data is optimized and escalated at each level from villages to counties, cities, and provinces, enhancing political clout at each level. He emphasized, “This distortion is not linear but accumulative due to the nature of the political and economic systems of the CCP.”
It’s noteworthy that the “external funds” indicator exposed by CCTV this time is not a core economic datum.
Wang He pointed out that CCTV deliberately chose this relatively obscure economic metric to raise awareness. The distinction between internal and external funds is a way for local authorities to showcase achievements, even if fully revealed, “one cannot deduce that the entire economic system is fabricated, this is an official tactic.”
The recent internal revelation by CCTV contrasts with the CCP’s past handling of GDP data falsification. Wang He recalled that Liaoning, Tianjin Binhai New Area, and Inner Mongolia had previously exposed inflated GDP figures.
“However, why didn’t other provinces follow suit? Because GDP data is a core economic indicator, and if every province disclosed falsifications, the entire CCP’s economic data would collapse, so the authorities suppressed this,” elucidating that “the CCP fundamentally lacks the will to address this issue.”
Furthermore, the CCTV exposure only targeted county-level units and did not implicate any officials above the provincial level, showcasing that “investigating three county-level units is inconsequential.” This approach is essentially about “administering a shot below to exhibit central authority. Not fabricating data is a form of achievement, and now fabricating data exposes another kind of achievement.”
Currently, the CCP Central Authorities have briefed on the formality-based governance initiative regarding the exaggeration of external funds in Henan province. The Henan Provincial Department of Commerce stated, “No longer requiring grassroots and enterprises to collect and report external fund data.” However, experts generally believe that discontinuing a specific statistical item does not address the root cause.
Based on public records, the current CCP Secretary of Henan Province, Liu Ning, formerly served as Governor of Qinghai, Liaoning, and Party Secretary of the Guangxi Zhuang Autonomous Region. In December 2024, he was appointed to Henan. Wang Kai, the Governor of Henan Province, was transferred from another province to Henan in April 2021.
While the Henan data scandal unfolded, international banks like Goldman Sachs and Standard Chartered remained optimistic about the Chinese economy, suggesting that the central bank may not lower interest rates, sparking skepticism due to the paradox.
Wang He stated that international research institutions have long been using alternative indicators such as railway transport volume, “Li Keqiang Index,” and nighttime light brightness to estimate the Chinese economy. He emphasized that while there is a widespread belief internationally that CCP’s economic data is unreliable, official reports still primarily rely on CCP official figures.
Both experts agree that as long as the CCP’s systemic logic remains unchanged, data falsification will persist. Wong pointed out, “The official exposure of falsification essentially reclaims the publishing rights of statistical data to control overall financial risks. Falsification is a systemic outcome, and the next exposure of fabrication is only a matter of time.”