AT THE start of 2014 a senior official in the statistics bureau of Liaoning, an industrial province in north-eastern China, told his army of boffins to cultivate a spirit of innovation in their work. “Liberate your minds,” he exhorted an annual planning meeting. They took him at his word. In one of the biggest scandals to rock the murky world of Chinese economic data, the government admitted this month that Liaoning had faked its fiscal data from 2011 to 2014, inflating revenues by about 20%.
For those inclined to distrust all Chinese numbers, the announcement was simple vindication. But a closer look paints a different picture: of central authorities wanting to get a better read on the economy but being impeded at the local level—and by one of the usual suspects at that.
In manipulating statistics, Liaoning has form. When Li Keqiang, now prime minister, was Communist Party chief of the province in the 2000s, he confided to America’s ambassador to China that its GDP figures were “man-made” and unreliable. Mr Li’s comments have often been cited by critics of Chinese data, though his concerns focused just on…Continue reading