The latter part of 2016 saw enhanced economic stimulus from Chinese authorities, a subsequent stabilisation & growth in economic activity, and an accompanying surge in property prices as liquidity sloshed out of the real economy (if it even got there in the first place). Still, mustn’t grumble.
While it will hardly come as a surprise to China watchers who have for years mocked China’s cooked “data”, overnight the state-run People’s Daily reported that the severely impacted by the commodity crunch of the past 2 years rust-belt province of Liaoning fabricated fiscal numbers from 2011 to 2014, citing local officials have said, raising fresh doubts about the accuracy of China’s economic data just two days ahead of the release of China’s GDP report.
The city of Shenyang in Liaoning province of China
City and county governments in the northwestern region committed fiscal data fraud in the period, Governor Chen Qiufa said at a meeting with provincial lawmakers Tuesday, Bloomberg adds. Not surprisingly, the fabricated economic data was meant to show a state of economic strenght with fiscal revenues inflated by at least 20%, and some other economic data were also false, the paper said, without specifying categories.
Why paint a rosier picture? The same reason as alwasy: Chen said the data were made up “because officials wanted to advance their careers.” The fraud misled the central government’s judgment of Liaoning’s economic status, he said, citing a report from the National Audit Office in 2016.
The admission of fraud comes now because with growth now moderating, officials have “sought to improve the credibility of economic data” as diffusing financial risks becomes a key policy consideration, along with keeping growth ticking along at a rapid clip.
And while the outgoing Obama administration is cracking down on “fake news”, Ning Jizhe, head of the National Bureau of Statistics, has said China is focusing on preventing “fake economic data” as well as increasing the quality of its statistics. Naturally, incidents such as this one will make China watchers that much more skeptical.
Fake economic data may be the least of Liaoning’s worries which in recent years has seen an unprecedented purge of more than 500 deputies from its legislature Bloomberg reports. The deputies were implicated in vote buying and bribery in the first provincial-level case of its kind in the Communist Party’s almost seven-decade rule, according to the official Xinhua News Agency. Former provincial party chief Wang Min, who led Liaoning from 2009 until 2015, was earlier expelled following corruption allegations by China’s top anti-graft watchdog.
As China’s debt-fueled economic impulse continues, if only for a few more months, we wxpect more such instances of fake data to swim to the surface.
Construction output across the eurozone climbed in November for the second month in a row, but the annual rate cooled sharply.
Output rose by 0.4 per cent in November from October, matching the previous months’ pace that was revised lower from a rise of 0.8 per cent. Production in construction was steady on a year-on-year basis, compared with a 1.8 per cent advance in October.
The rate of growth in the building of residential and commercial buildings slowed to a month-on-month rate of 0.3 per cent, from 0.8 per cent in November. In contrast, the civil engineering component, which includes structures like railyways, was up by 1.7 per cent after a 2.3 per cent dip in the prior month.
Construction accounts for more than 5 per cent of the EU’s gross domestic product.
Activity was robust in Germany, the eurozone’s economic powerhouse, increasing by 1.5 per cent. However, it dipped by 0.2 per cent in France, the bloc’s No. 2 economy.
The IMF today cut India’s growth rate for the current fiscal year to 6.6 per cent from its previous estimate of 7.6 per cent due to the “temporary negative consumption shock” of demonetisation, days after the World Bank also decelerated India’s growth estimates.
“In India, the growth forecast for the current (2016–17) and next fiscal year were trimmed by one percentage point and 0.4 percentage point, respectively, primarily due to the temporary negative consumption shock induced by cash shortages and payment disruptions associated with the recent currency note withdrawal and exchange initiative,” the International Monetary Fund (IMF) said in its latest World Economic Outlook (WEO) update released today.
The IMF said that after a lacklustre outturn in 2016, economic activity is projected to pick up pace in 2017 and 2018, especially in emerging market and developing economies.
Economic activity in both advanced economies and emerging market and developing economies (EMDEs) is forecast to accelerate in 2017–18, with global growth projected to be 3.4 per cent and 3.6 per cent, respectively, again unchanged from the October forecasts, it said.
As per new IMF projections, India’s growth in 2016 is now estimated to be 6.6 per cent as against 7.6 per cent earlier forecast.
That’s the (screenshot of the) summary of the summary, in very brief.
So that is slow going, but at least its moving in the right direction, For now.
This report summarizes the reports from all regional research divisions, mainly at the Bank’s branches in Japan, and is based on data and other information gathered for the meeting of general managers of the Bank’s branches held today.