China’s major domestic product ( GDP ) numbers have long been asked by the international community because of its lack of transparency. Data through recently leaked government inner documents from Dalian city of Liaoning Province uncover a grim picture associated with China’s economy amid the particular resurgence of COVID-19 in different regions since This summer.
While the worldwide economy has declined dramatically this year due to the COVID-19 pandemic , and most countries’ economies have experienced negative growth rates, The far east has reported a several. 2 percent rise in the GDP (Gross Domestic Product) in the second quarter, when compared to same period last year, based on its National Bureau associated with Statistics.
Nevertheless , the leaked documents attained by The Epoch Times disclose that Dalian city’s economic climate took a dive within the first half of 2020 plus government debt was 10 times above the worldwide warning level set with the European Union.
Among the documents titled, “The Completing Estimated Major Economic Signals, ” issued by the Data Bureau of Lushunkou area in Dalian, reflected a far worse situation than the formally published data for the initial five months of this season.
On Come july 1st 24, the Liaoning Provincial Bureau of Statistics released data, stating that within the first half of 2020, Dalian “achieved a regional GROSS DOMESTIC PRODUCT of 315. 50 billion dollars yuan, a year-on-year loss of 3. 5 percent at similar price/value. ”
In the context of worldwide economic decline caused by COVID-19 and the subsequent lockdowns, Dalian’s reported 3. 5 percent GROSS DOMESTIC PRODUCT decline is relatively mild.
But experts possess long questioned the veracity of China’s statistics. Consider Dalian as an example.
Leaked Reports Expose Dalian’s Double-digit GDP Slump
According to data in the Dalian Bureau of Data, Dalian’s GDP in the initial half of 2019 reached 367. 10 billion yuan ($53 billion). Calculated in complete terms, then, Dalian’s GROSS DOMESTIC PRODUCT in the first half of 2020 actually decreased by 6. 6 percent, rather than the formally reported “decline of 3 or more. 5 percent. ”
The Dalian municipal authorities also manipulated GDP information. Dalian’s GDP in 2018 and 2019 were 766. 8 billion yuan ($112. 1 billion) and seven hundred. 17 billion yuan ($102. 4 billion) respectively; within absolute terms, last year’s GDP fell by nine. 1 percent from the previous yr. However , authorities still used opaque comparable figures in order to reverse the sharp decrease in Dalian’s GDP within 2019 to “6. 5% year-on-year growth. ”
The internal documents attained by The Epoch Times more confirmed that authorities fudged their data.
Leaked internal reports from the Lushunkou District of Dalian, which is one of its seven zones, in the first half of the entire year revealed that Dalian’s economic climate actually experienced a sharp decline—several times more than what was documented in official data.
At present, there are 3 types of GDP accounting strategies in China: production technique, income method, and expenses method. The Chinese routine mainly uses the production solution to calculate GDP, while the United states of america and other international finance businesses use the expenditure method.
Three indicators—total store sales of consumer items, fixed asset investment, plus import and export business surplus—are the most important components of GROSS DOMESTIC PRODUCT accounting in expenditure technique, from which the actual changes within Dalian’s GDP can be seen.
The internal report demonstrates in the first four weeks of 2020, the absolute variety of “social fixed asset investment” decreased by 25. seven percent year-on-year, and the city-wide growth rate was -17 percent. In the first 5 months of this year, the particular year-on-year growth rate had been -14. 3 percent. The particular city’s growth rate reaches -8. 9 percent.
“Total retail product sales of consumer goods” dropped 20. 1 percent year-on-year within the first four months, using a citywide decrease of 24. six percent; in the first 5 months of this year, there is a year-on-year decrease of sixty four. 2 percent and a citywide decrease of 21. 4 %.
“Commercial casing sales” in the first 4 months decreased by 53. 8 percent year-on-year, as well as the city’s growth rate slipped 14. 8 percent; within the first five months of the year, the year-on-year development rate was -48. 1%, and the city’s growth price was -21. 9 %.
These 3 elements are similar to the metrics of total retail product sales of consumer goods, set asset investment, and transfer and export trade excess (adverse) in the CCP ’s official statistics, which can be utilized as the main basis to get calculating local GDP, and may reflect the real changes in the GROSS DOMESTIC PRODUCT of Lushunkou district plus Dalian city.
In Lushunkou and Dalian, which has little export or even import trade, the two main indicators that have the greatest effect on the GDP are “social investment in fixed assets” and “total retail product sales of consumer goods, ” that have both fallen beneath nearly 20 percent within the first four months of the year.
The particular “total retail sales associated with consumer goods, ” that has the greatest impact on GDP, provides continued to decline, actually falling below 60 % in Lushunkou. In contrast, the particular Chinese Communist Party (CCP) claims that consumption provides contributed as much as 60 in order to 80 percent of China’s GDP in the past three years.
Dalian’s “commercial casing sales” and “total store sales of consumer goods” showed an accelerated decline—the decline widened from fourteen. 8 percent in the very first four months to twenty one. 9 percent in the very first five months. These two signals reflect the current drop within consumption in China.
To sum up, the double-digit decline in economic signals disclosed in the internal document reveals the truth about Dalian’s economic climate this year: not only has the GDP plummeted, but its economy is still deteriorating.
It is worth mentioning that will although the Statistics Bureau associated with Lushunkou District did not get into quarterly gross product information in its internal statements, it offers preset a value of -3. 0 percent for the GROSS DOMESTIC PRODUCT growth rate in the initial six months.
Lushunkou District’s Debt Ratio Is definitely Alarming
Within April this year, China’s Ministry of Finance reported that will as of the end of 2019, the local government debt percentage was about 82. 9 %, which was lower than the worldwide accepted standard of hundred to 120 percent, plus lower than the 60 % warning line put out with the EU.
Nevertheless , a leaked government record shows a much grimmer image of government debts.
The real numbers are usually disclosed in Lushunkou’s “Report on Work to Prevent plus Resolve Government Debt Dangers, ” submitted to the Dalian municipal government: “As from the end of June 2020, the total debt balance associated with Lushunkou was 27. 68 billion yuan, including the thirteen. 292 billion government financial debt and the 14. 388 billion dollars hidden debt. ” “Our district debt ratio can be 736. 30 percent, and the concealed debt risk level will be red, ” it observed.
The region government has actually long gone bankrupt, as China present affairs commentator Li Linyi said, after analyzing the information shown on the internal statement.
Despite the large debt, Dalian is apparently operating normally. The leaked out documents also disclosed the way the local government plans on repaying the particular huge debt.
The district government mentioned in the report that within 2020, it needs to repay a few. 48 billion yuan financial debt; however , it only provides “100 million yuan within budget ” to pay for this. The Lushunkou district federal government listed many tactics to get money to pay the remaining several. 38 billion yuan financial debt, including “withdrawing money” through the banking industry and property financing—“make full use of nonproductive land” and “taking property to finance through the new State Development & Purchase Corporation, ” the record stated.
The particular Lushunkou district government furthermore disclosed in the document that this report was issued within compliance with instructions in the Dalian Municipal Finance Agency, in order to assess the risk amount of the local government’s hidden financial debt.
Li feels that this means that the higher-level CCP authorities are completely aware of the government debt dangers, knowing that they could capsize anytime. Thus, they are trying to find out the actual internal numbers. This also verifies that the CCP’s debt turmoil is far beyond the exterior world’s imagination and has currently exceeded the critical type of a financial crisis, he additional.
The revival of the COVID-19 outbreak given that July has caused various areas in Dalian to become locked down again. Home communities in Dalian had been continuously sealed off simply by authorities. Many residents grew to become unemployed and economic manufacturing came to a halt. Li pointed out that the CCP’s lockdown measures have worsened Dalian’s economic decline.
He Jian added to this report