Statistics officials in Hejin city in northern Shanxi province gave companies “seriously untrue” numbers to submit for 2011, the Beijing-based National Bureau of Statistics said in a statementon its website dated March 12.

China aims to boost confidence in its statistics system by cracking down on leaks of market-moving numbers and limiting opportunities for provincial officials to massage data. Discrepancies between national and local numbers for gross domestic product indicate that the government still has more work to do.

“The national bureau is demonstrating its resolve in improving the nation’s data accuracy but it has a long way to go,” said Lu Ting, a Hong Kong-based economist at Bank of America Corp. In general, national-level data from the bureau is “more trustworthy” while local numbers “need a closer look.”

Layers in the data collecting system have added to inaccuracies and discrepancies. In 2011, the 31 provincial-level governments reported a combined GDP of 51.8 trillion yuan ($8.2 trillion), 4.6 trillion yuan higher than the national figure calculated by the statistics bureau, the state-backed Economic Daily reported last month.

Data Tampering

Last month, the bureau started using a unified system to directly collect output, retail sales and investment data from 700,000 companies, to boost accuracy and reduce manipulation, agency head Ma Jiantang said Feb. 14. Any tampering or falsification will be treated “seriously,” Ma said.

The NBS has notified the Hejin government of irregularities and the officials responsible are being “dealt with,” according to the March 12 statement. In a separate release dated Feb. 21, the bureau said officials in Yongchuan district, Chongqing, had interfered in companies’ data reporting in November.

Last year, China jailed two officials for leaking classified economic data in its highest profile crackdown on selective disclosure linked to insider trading.

Wu Chaoming, a researcher with the People’s Bank of China was sentenced to six years in prison for willfully revealing secret information to 15 people in the securities industry, Li Zhongcheng, a state prosecutor said in October. Sun Zhen, a former secretary in the country’s statistics bureau, received five years on similar charges.

To contact Bloomberg News staff for this story: Li Yanping in Beijing at yli16@bloomberg.net

To contact the editor responsible for this story: Paul Panckhurst at ppanckhurst@bloomberg.net

http://www.bloomberg.com/news/2012-03-16/chinese-companies-forced-to-falsify-economic-data-bureau-says.html

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