More Fake Chinese Statistics

An article on Caixin Online is an interesting example of how national and provincial statistics are "compiled" in China. Schoolhouse Shock exposes the dismal state of public education in poor rural areas. This is of course terrible for the long-run economic prospects of the residents (and the overall economy). But it also shows how all the educational statistics are completely fabricated. Regarding drop-out rates, the article says:

Some officials at schools in Gansu Province said on condition of anonymity that the dropout rate is roughly 30 to 40 percent in junior high schools.
Provincial government statistics put the dropout rate at 0.6 percent. Central government figures for Gansu state the dropout rate is lower than 3 percent and declining.

This should be a wake-up call to those tempted to give China's National Statistics Bureau the benefit of the doubt. If educational statistics are so far from reality, why would the economic ones be any better? 

Don't Blame Europe This Time - It's All About China

Asian stock markets have opened the week extremely weak (no pun intended). No doubt much of that is due to the SPX rolling over on Friday, but there is more. The Nikkei is down 1.8%, Hang Seng almost 3% and Shanghai 1.2% - all of them more than the 1% or so drop of the S&P in the last trading session of last week.

The mainstream media is quick to blame the noise out of Europe, but there is

Market Musings - EUR, China

Using the time-honored headline test, this may mean that the Euro's woes are coming to an end. Technically the chart appears to be stabilizing as well. In addition, the market's focus is shifting to the inconsistencies in China's economic statistics, leading some to believe that the whole data set is actually the product of the propaganda department and not the National Statistics Bureau. Efficiency must have really improved enormously if the zero growth in electricity consumption is indeed correct, given that GDP growth was +7.6% annualized.

Better Late Than Never - Chinese Data Is Publicly Questioned

We have thought for some time that data published by the National Bureau of Statistics and other official organs of the Chinese government should not be taken at face value. See for example Can One Trust China's Economic Statistics? written in early February. A week ago The New York Times came out with a detailed account of much of the mounting evidence in Chinese Data Mask Depth of Slowdown, Executives Say.

There are many reasons to suspect that, even without having actual evidence that falsification is happening. And we don't always need evidence, because in order for an investor to be profitable

The China PMI Contradiction. Or Who Can You Trust?

Very often the simplest explanation is the best. Why did HSBC's China PMI show a 4th consecutive month of contraction in March, while the official numbers generated by the National Bureau of Statistics indicate continuing growth?

Two months ago in Can One Trust China's Economic Statistics? we looked at some indications that the official government statistics may be untrustworthy. As all the evidence points to a serious slowdown,

Can One Trust China's Economic Statistics?

The Dec reading of the Chinese official Purchasing Managers Index came in better than expected at 50.5. This would indicate a small expansion in manufacturing activity. If it were free of official manipulation, that is. And therein lies the issue with China's economic statistics - it is not clear if the numbers can be trusted.

Anecdotal evidence has been pointing to shrinking margins and difficulty in obtaining financing for the majority of Chinese small and medium manufacturers. Guangdong province is home to a large percentage of Chinese manufacturing and has in the past been dubbed "the factory of the world". However a survey by the