China said it will start an investigation to ensure the accuracy of data filed by companies as part of efforts to improve the reliability of statistics in the world’s second-largest economy

China Starts Probe to Ensure Accuracy of Economic Data

China said it will start an investigation to ensure the accuracy of data filed by companies as part of efforts to improve the reliability of statistics in the world’s second-largest economy.

There is an urgent need to prevent fraud in data submission, National Bureau of Statistics head Ma Jiantang was cited by China Information News today as having said on June 24. Those found submitting inaccurate information for major statistics may be “severely punished,” the newspaper, published by the bureau, reported without citing anyone.China’s government is struggling to win the trust of investors and economists for its data, with exports and imports among the latest indicators to be scrutinized on concerns fake invoices inflated numbers. Li Keqiang, who became premier this year, said in 2007 that gross domestic product figures were “man-made” and “for reference only,” according to a WikiLeaks cable published in 2010.

“The problem is pretty pervasive and rather systemic,” said Zhang Zhiwei, chief China economist at Nomura Holdings Inc. in Hong Kong. “I don’t expect a dramatic change in terms of data quality. There will be improvement but it will take time.”

Ma, in an open letter posted on the bureau’s website yesterday, asked companies to file data “truthfully and completely.” Some local governments were found to have intervened in companies’ filing process, and the bureau will increase penalties on those who commit fraud in statistics submission, the letter said.

Better Data

The statistics bureau has been improving data methodology and collection to provide more reliable figures for policy makers. In February 2012, it started using a unified system to directly collect output, retail sales and investment data from 700,000 companies to boost accuracy and reduce manipulation by local authorities.

An unprecedented run of better-than-forecast export growth published by the General Administration of Customs earlier this year spurred skepticism of the data at banks including Goldman Sachs Group Inc. Export gains last month were at a 10-month low and imports dropped after a crackdown on fake trade invoices used to disguise money inflows.

The statistics bureau exposed inflated data on industrial output in Henglan town in southern Guangdong province, according to a June 14 report by the state-run Xinhua News Agency. The bureau said in March 2012 that officials in Hejin city in northern Shanxi province gave companies “seriously untrue” numbers to submit for 2011.

To contact the reporter on this story: Shamim Adam in Singapore at

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (, the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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