[Exclusive] Internal Documents Reveal GDP Data Fabrication by Shaanxi Government

Workers look at cranes lifting containers onto cargo vessels at a port in Yantai, Shandong province, China October 17, 2019. REUTERS/Stringer

By He Jian and Cecilia Lim

According to statistics released by the Chinese government in April 2020, China was hit by a 6.8% drop in its gross domestic product (GDP) year-on-year in the first quarter of 2020. This is the first time that China has recorded a negative GDP growth since it first released quarterly GDP data in 1992. 

However, according to a set of internal documents from the Xianyang Municipal Government obtained by The Epoch Times, the CCP virus (also known as coronavirus or COVID-19) has taken a far heavier toll on the Chinese economy than what was indicated in data published by the CCP. 

 Among the documents obtained by The Epoch Times, the First Quarter Economic Report provided an overview of economic conditions of the various counties under Xianyang City — a prefecture-level city in central Shaanxi Province in Northwest China. Oddly, the report reveals severe inconsistencies between the GDP growth data shown in the internal report and those published on its official website. 

GDP Data of Multiple Counties Under Xianyang City Are Likely Falsified

Under the Communist regime, the quarterly Economic Reports produced by the Development and Reform Bureau are internal documents meant to be circulated within the local government and shared with the higher level of government. The statistics contained in the report may or may not match those published officially by the Chinese government. 

The First Quarter Economic Report obtained by The Epoch Times of various counties under Xianyang City, for example, reveals stark discrepancies between the economic data written in these internal reports and the data released publicly by the Xianyang government.

 

First Quarter Key Economic Indicators published by Xianyang Statistics Bureau. Highlighted data: (1) Sanyuan County: GDP: 3.713 billion RMB; Year-on-year GDP growth: -17.8. (2) Changwu County: GDP: 2.31 billion RMB; Year-on-year GDP growth: 0.3%. (3) Xunyi County: GDP: 1.413 billion RMB; Year-on-year GDP growth: -6.5%. (4) Chunhua County: GDP: 1.132 billion RMB; Year-on-year GDP growth: -13.7%.  

For instance, the Key Economic Indicators data published by Xianyang government shows that Changwu County registers a year-on-year GDP growth of 0.3%, reaching a GDP level of 2.31 billion RMB. The rest of the counties and sub-cities all record a negative year-on-year GDP growth ranging from -3% to -20.8%.

However, the internal First Quarter Economic Report pictures a different economic outlook from what the published data suggests. 

 

First Quarter Economic Report by Changwu County Development and Reform Bureau. The underlined sentence reads: “For the period from January to March, due to the pandemic, the county’s GDP is projected to be 2.014 billion RMB, a 4.8% year-on-year decrease.”

Instead of a positive growth, the First Quarter Economic Report generated by Changwu County Development and Reform Bureau reports that “for the period from January to March, due to the pandemic, the county’s GDP is projected to be 2.014 billion RMB, a 4.8% year-on-year decrease”.

While its internal report indicates an economic recession faced by Changwu County, the published numbers paint a slight expansion.

Other than Changwu County, the First Quarter Economic Report of Sanyuan, Xunyi and Chunhua county project a negative GDP growth of -40%, -20% and -27% respectively. 

In the Key Economic Indicators data published by Xianyang government, however, the GDP growth of Sanyuan, Xunyi and Chunhua county were shown as -17.9%, -6.5% and -13.7%, respectively. 

To put it simply, the GDP declines reported in the internal documents of these three counties are more than double the official data released by the Xianyang government.

 

First Quarter Economic Report by Sanyuan County Development and Reform Bureau. The first underlined sentence reads: “The first quarter GDP is projected to be 1.7 billion RMB, a 40% decrease compared to the same period last year.”

The leaked documents obtained by The Epoch Times thus raise the question of whether the statistics published by Xianyang government were deliberately falsified to paint a nicer picture of its economy.

Take Sanyuan county as another example: The GDP projection reported in the internal First Quarter Economic Report is 1.7 billion RMB — standing in stark contrast to the 3.713 billion RMB shown in the Key Economic Indicators data published on Xianyang Statistics Bureau’s website.  

Although Xianyang City is only one of the over 300 prefecture-level cities in China, the blatant inconsistencies between its published economic data and those stated in its internal documents cast doubt on the GDP of China as a whole.

China reports its GDP by industry, which is the sum of the value of its primary, secondary and tertiary industries. According to the National Bureau of Statistics of China, it publishes quarterly GDP data based on statistics collected from various levels of governments.   

Therefore, if the Chinese governments at various levels (including the statistical departments at various levels) falsify their regional economic data, the National Bureau of Statistics will not get close to the true data regardless of which GDP calculation approach it adopts. Further, the GDP and other economic data released annually by the National Bureau of Statistics often closely match the target pre-announced by CCP top leaders in an uncanny way. To some extent, the occurrences of such small probability events serve to undermine the credibility of data released by the National Bureau of Statistics.

It’s worth noting that the National Bureau of Statistics of China regularly provides China ’s GDP data to the United Nations, the International Monetary Fund, the Organisation for Economic Cooperation and Development, the Asian Development Bank and other international organisations. In the late 1990s, at the request of the CCP, international organisations including the World Bank started directly citing GDP data published by the Chinese government without making adjustments.

Internal Documents Suggest China Might Be Facing a Dire Economic Recession 

On April 27, Tang Renjian, the governor of Gansu Province, claimed that Gansu’s economy is facing urgent challenges. Although CCP claimed that production in China has resumed, the Gansu governor’s rare speech may offer a true glimpse into the Chinese economy.

Tang Renjian disclosed that among the enterprises that have resumed operation, 52.1% of the small-scale industrial firms, 62.4% of the construction companies, and 54.9% of the small-scale service companies were only operating at a production level that is more than 50% lower than normal. 

“Many companies are seeing very few or no customers despite having resumed operation” and small and medium-sized enterprises are facing a crisis that could threaten their survival. 

Small-scale enterprises refer to industrial firms with a main business income of below 20 million RMB, or service providers with an operating income below a certain standard.

The internal documents of Xianyang government obtained by The Epoch Times provide further evidence that not only Gansu, but other regions in China are also facing difficult economic challenges.

 

First Quarter Economic Report by Xunyi County Development and Reform Bureau. The first underlined sentence reads: “The first quarter GDP of the county is projected to decrease by 20%.” The second underlined sentence reads: “Only 18 out of the 46 businesses that have resumed operations were able to reach 70% of the normal production level; more than 60% of the companies resuming operations were not able to reach normal production level.” 

For example, Xunyi County’s First Quarter Economic Report obtained by The Epoch Times disclosed that although 92% of the 50 large scale companies within the county have resumed operation, only 18 were able to sustain 70% of the normal production level due to the pandemic. In particular, the tertiary industry was hardest hit by a severe lack of consumption capacity. 

Large scale companies refer to those with a main business income of 20 million RMB and above, qualified construction companies, all real estate developers, wholesale and retail businesses, as well as hospitality companies above a certain size and service industries above a certain scale.

 

First Quarter Economic Report by Changwu County Development and Reform Bureau. The first underlined sentence reads: “Due to the pandemic, although large-scale industrial firms have resumed operation, they were not able to not produce at full capacity.” The second underlined sentence reads: “Retailers, service providers such as hospitality companies, and self-employed businesses have basically ceased operation, which has a sizeable negative impact on the growth of the tertiary industry.”

The First Quarter Economic Report of Changwu County also revealed that it is experiencing weak economic growth. 

“Hit by the impact of the pandemic, although large-scale industrial firms have resumed operation, they were not able to produce at full capacity,” the report reveals. It adds that “retailers, service providers such as hospitality companies, and self-employed businesses have basically ceased operation, which has a sizeable negative impact on the growth of the tertiary industry”.

Internal documents of Sanyuan County also indicate that “affected by the pandemic, most of the large-scale businesses in the county were shut down between January and February”, “industrial firms were under producing” and “tertiary industries were almost in stagnation”.

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