China Admits To Fake Data (Again) - Hidden Debt & Inflated Revenues

It"s not the first time (and it won"t be the last), but a recent nationwide audit found some local governments inflated revenue levels and raised debt illegally, once again crushing China"s credibility on the global stage when it comes to economic performance.

As Bloomberg reports, ten cities, counties or districts in the Yunnan, Hunan and Jilin provinces, as well as the southwestern city of Chongqing, inflated fiscal revenues by 1.55 billion yuan ($234 million), the National Audit Office said in a statement on its website dated Dec. 8.

The inspection, which covered the third quarter, also found that five cities or counties in the Jiangxi, Shaanxi, Gansu, Hunan and Hainan provinces raised about 6.43 billion yuan in debts by violating rules, such as offering commitment letters.

 

The findings are a blow to China’s bid to rein in data fraud, which has been widespread in some of the poorer provinces where officials were incentivized to inflate the numbers as a way of advancing their careers.

 

Concern from investors wanting to be able to trust data out of the world’s second-largest economy led to the government trying to crack down on the practice, with President Xi Jinping saying in March that data fraud “must be throttled,” according to the state-run Xinhua News Agency.

While historically investors would rapidly shrug this news off and buy more stocks, with Chinese sovereign bond yields near their Maginot Line of 4.00%, losing credibility could be critical.

A new supervisory body was set up within China’s statistics office in April to bolster and ensure data authenticity and quality.

The country is also shifting to the latest United Nations-based statistical standard and using computers -- rather than local reports -- to calculate provincial gross domestic product, the chief economist said in September.

WW3 Alert: US And China Preparing For ‘All Hell To Break Loose’ On Korean Peninsula

The United States and China are preparing for a situation in which all hell breaks loose on the Korean Peninsula.  Both nations are taking unprecedented steps as tensions toward a nuclear war ramp up even more.

The US has stepped up military drills, practiced air raids, and reportedly started preparing to seize North Korea’s nuclear weapons by force, a feat South Korea has declared won’t be all that easy. South Korean officials have been talking up a pause in military drills in hopes that it will lead to a peaceful Winter Olympics in February, but the US has yet to agree to halt said drills.  Instead, the US  brought in a record number of stealth aircraft this month to train up on an air war against North Korea. Immediately after the drill, which featured a marked increase in simulated bomb runs on North Korean targets, the US and South Korea reportedly engaged in drills to infiltrate North Korea and neutralize its weapons of mass destruction.

At a speech at the Atlantic Council last week, Secretary of State Rex Tillerson said the US was preparing plans to seize loose nuclear weapons, should North Korea somehow collapse or become unstable.

President Donald Trump’s national security adviser, H.R. McMaster, also flatly rejected the clearest path to peace by saying the US would never accept a nuclear-armed North Korea. He recommitted the US to using force if necessary.

“We’re not committed to a peaceful resolution — we’re committed to a resolution,” McMaster told the BBC. “We have to be prepared, if necessary, to compel the denuclearization of North Korea without the cooperation of that regime.” –Business Insider

China is also bracing itself for a potential war. Across North Korea’s border in China’s Jilin province, state-run media ran a full-page instructional package on how to survive a nuclear blast. The page doesn’t mention North Korea, but it doesn’t need to. According to Business Insider, there are also a few notable new additions to Jilin. Five new refugee camps built “because the situation on the China-North Korea border has intensified lately,” a leaked document seen by The New York Times said. The camps could accommodate thousands of North Koreans who might pour across the border in a time of war.

Of course, China’s preparations don’t end there either. They also have an offensive approach to the heightened tensions. China’s air force engaged in exercises along “routes and areas it has never flown before” earlier this month, with surveillance aircraft over the Yellow and East seas near the Korean Peninsula, according to the South China Morning Post. “The timing of this high-profile announcement by the PLA is also a warning to Washington and Seoul not to provoke Pyongyang any further,” Li Jie, a military expert based in Beijing, told the Post, using the abbreviation for the Chinese People’s Liberation Army (PLA). In addition to flexing its military muscle against the US, China has been increasingly assertive in the South China Sea. It has also dispatched military spy planes to encircle Taiwan and provide up-to-date info, which the Macau-based military observer Antony Wong Dong told the Post was “very unusual.”

All of this is in preparation for an “all hell breaks loose” scenario that’s likely to unfold on the Korean Peninsula.

Local Chinese Newspaper On North Korean Border Shares Some Advice On Surviving A Nuclear Attack

Just yesterday the Russian foreign ministry issued a stark warning to the international community that"the situation on the Korean Peninsula is on the brink of war," adding that "Kim seeks to raise the stakes before any talks." 

Of course, these warnings followed the announcement earlier this week that the US and South Korea launched their largest aerial drills yet, less than a week after North Korea tested its new Hwasong-15 missile which military observers said has the capacity to strike Washington DC, or nearly any other location in the continental US.

As we reported Sunday, the annual US-South Korean drills, called Vigilant Ace, will run until Friday. Six F-22 Raptor stealth fighters will be deployed among the more than 230 aircraft taking part. Not surprisingly, the North has condemned the exercises as yet another provocation.

And while continuous warnings such as these go mostly unnoticed by Americans, at least one local newspaper in the Jilin province of China on North Korea"s northeastern border figures its better to be safe than sorry and issued a helpful guide on what residents should do in the event of a nuclear attack.  Per Bloomberg:

An official Chinese newspaper near North Korea has published a page of articles on coping with nuclear attacks, in a sign of growing anxiety over Kim Jong Un’s weapons program.

 

The Jilin Daily -- the government newspaper of Jilin province on North Korea’s northeastern border -- published articles on page 5 explaining how nuclear weapons work and the damage they cause. The paper used cartoons to offer advice on what residents can do about radiation exposure and provided instructions on how to respond during an attack.

 

One article listed essential items for emergency kits, including fire extinguishers and breathing masks. Another warned that air raids could mean nuclear, chemical and biological attacks, and used the 1945 atomic bombing of Hiroshima as an example.

 

The cartoon images illustrated how residents should clean their bodies, boots and coats after being exposed to radiation. They suggested taking iodine tablets, if there is radiation nearby.

Meanwhile, the paper even offered some helpful cartoons for residents looking to prep for the nuclear apocalypse.  And while our Mandarin is not great, the cartoons seem to imply that so long as you cover your face with a cloth and down some iodine tablets...you"ll be just fine.

And, for those who like to be extra safe, the Jilin Daily also provides these helpful tips which presumably suggest you should clean your ears, take a shower and vomit as necessary.

Then again, we hear that taking "giant panic breaths" of pure oxygen also works well for scenarios such as these...