At a session of the recent Chinese People Consultative Conference in Beijing, Dong Dasheng, former Deputy Auditor General of the National Audit Office, talked about serious economic data fraud. Dong quoted a local official who said, "In the past few years the numbers were made too high. If the number is lowered (to match the reality) at once, it will (look like) a fall off the cliff. We have to digest the numbers over the years."
The issue of Chinese economic data fraud has been a widespread concern. This is the first time a former Chinese official has publicly acknowledged the problem.
As economic growth has been the main measure of performance evaluation of local governments, the GDP growth rate fraud is a very common problem. According to the Anbang Insurance Group, local data fraud includes not only foreign investment, but many areas such as GDP data, tax revenue, and investment. For example, tax revenues in many local governments saw a serious decline in 2014 and some places even had negative growth. In order for the numbers to look good, (local officials) would make adjustments in statistical definitions and the basis of comparison. Some simply cooked the numbers.
Source: BBC Chinese, March 4, 2015