The Chinese Communist Party has revised the quarterly accounting method for the value added in the financial industry in order to “combat” data manipulation and rectify GDP statistics. This indirectly acknowledges the fact that the CCP falsifies GDP and other statistical data, once again proving there is no smoke without fire.
Recently, First Financial reported that in order to improve the accuracy of GDP statistics, China’s National Bureau of Statistics made “optimized adjustments” to the quarterly accounting method for the value added in the financial industry during the first quarter of this year.
An authoritative market expert stated that in the context of insufficient demand for effective credit over the past two years, the old accounting method put pressure on indicators such as loan growth rates at key points like the end of the month, aiming to raise the value added in the financial industry in regions to boost GDP growth.
Local financial institution insiders previously disclosed that in order to meet the indicator requirements at critical points, local banks engaged in “deposit pulling” from enterprises or peers, leading to a transfer of deposits from one place to another. Once the timing passed and the data statistics were completed, the deposits and loans might return to their original places.
According to market experts, the old accounting method not only inflated the value added in the financial industry but also interfered with market expectations and macroeconomic regulation…
The English version of the South China Morning Post reported on May 15 that compared with other countries, China has a relatively higher proportion of the financial industry’s value added in GDP accounting. This figure is close to 8%, surpassing the average level of 4.8% for members of the Organisation for Economic Co-operation and Development (OECD).
Analysts believe that the significant contraction in China’s social financing data issued by the CCP’s central bank in April was due to adjustments in statistical methods. This was the first decline in nearly 20 years. In April, China’s total financing amount (including bank loans, bond issuance, and stock market financing) contracted by 18.9 billion Chinese yuan compared to the previous month.
The CCP has always demanded that statistical figures serve its political purposes, and the fact that its statistical data is falsified has been a well-known open secret. The Chinese public widely believes that the statistical figures provided by the CCP are heavily manipulated and not trustworthy. For a long time, international media and investors have also maintained a skeptical attitude toward the economic data officially released by the CCP.
On April 23, CCP state media reported that a draft amendment to the Statistics Law had been submitted to the National People’s Congress, China’s nominal highest authority, for review, claiming that “the draft proposes multiple provisions to further guard against and punish statistical fraud.”
On January 22, the CCP’s National Bureau of Statistics announced that “statistical fraud” had been included in the CCP Discipline Regulations.
This move by the CCP has been mocked by outsiders as “there is no silver here at all.”
The National Bureau of Statistics of the CCP has stated, “Statistical fraud is the most significant corruption in the statistical field, which disrupts and even misleads macro decision-making.” Meanwhile, state-owned and private enterprises across China have commonly complained that government departments habitually and institutionally pressure them to submit statistical figures that comply with superiors’ directives.
On March 18, the CCP National Bureau of Statistics released economic data for January and February 2024.
Observers found discrepancies in a series of economic data released by the CCP. For instance, from January to February, the national fixed asset investment (excluding farmers) was 5.0847 trillion yuan, with a year-on-year increase of 4.2%. This figure did not match the data shown on the official website of the National Bureau of Statistics.
Independent commentator Cai Shunkun was the first to reveal the falsification of CCP economic data, writing on an online platform: “The National Bureau of Statistics of the CCP is becoming more shameless.”
Political and economic scholar Li Hengqing in the United States told the Epoch Times that they are not at all embarrassed. “Now, from Xi Jinping to officials at all levels below, they all know about the falsification. And the approach they take is like saying, ‘I am a rogue, who can I fear.’ This is not a joke. They are using this (falsification) method to its fullest.”
Taiwanese macroeconomist Wu Jialong also told the Epoch Times that the issue of the accuracy of CCP data is no longer worth discussing because the economic data officially released by the CCP, from the GDP growth rate to other indicators, is unreliable, so talking about it further is meaningless.
He revealed that mainland Chinese friends informed him that the CCP invented a new method to maintain GDP growth: lowering the data from the previous year, so even if the growth was only 1% or 0.5%, this year they could achieve a good growth rate of 4% or 5%. And they repeat this process every year.
Some local governments in China have also admitted to falsifying their GDP data over the long term. In January 2017, during the “two sessions” of Liaoning Province in 2017, then governor Chen Qiufa admitted in a government work report that the GDP of Liaoning Province in 2016 was overstated by 23%, and financial data manipulation existed from 2011 to 2014.
In June 2017, the official website of the CCP Central Commission for Discipline Inspection targeted Inner Mongolia directly, citing the problem of “economic data falsification.” Jilin Province was also mentioned.
In January 2018, the issue of falsifying economic data by local governments resurfaced. On January 3 of that year, during the Inner Mongolia Economic Work Conference, the government publicly stated that general public budget revenue for 2016 was reduced by 26.3%, and the value added in industries above a certain scale was adjusted by 40% for 2016.
Subsequently, during the “two sessions,” Tianjin Binhai New Area admitted that there were issues with the statistical caliber, and China’s 2016 gross domestic product was adjusted from one trillion yuan to 665.4 billion yuan, a reduction of nearly one-third.