A comprehensive investigation by Chinese financial media outlet Yicai has exposed widespread fraud in China’s export statistics, revealing that local governments have not only permitted but actively orchestrated schemes to artificially inflate trade figures. This comes as Beijing announced that its trade surplus for the first eleven months exceeded $1 trillion, reaching a historic high.
The report details a systematic fraud involving “bought export data,” where shell companies purchase export statistics from customs brokers to claim government subsidies. Unlike traditional tax fraud schemes, these operations rely on local government rewards for export performance. Companies establish numerous shell entities with foreign trade qualifications, purchase export data that never actually occurred in their registered locations, and receive financial incentives based on these fabricated figures.
In one case from an inland province, defendants allegedly established shell companies across multiple locations and purchased export data from other provinces, defrauding the government of over 100 million yuan ($13.8 million) in export incentives. A similar case in southwestern China involved more than 100 shell companies and fraudulent claims exceeding 200 million yuan ($27.6 million).
Evidence suggests local governments not only knew about these practices but actively participated. Family members of defendants stated the schemes were designed to “cooperate with the government in achieving performance targets.” Some officials provided explicit or implicit support, with one former commerce bureau chief receiving millions in kickbacks through profit-sharing arrangements.
Legal expert Shi Zhengwen from China University of Political Science and Law criticized the export incentive policies, arguing they distort market competition and violate international trade rules. He noted that such data manipulation contradicts Beijing’s stated goals of high-quality development and creating a world-class business environment, suggesting local governments prioritize short-term targets over genuine economic progress.
Source: Central News Agency (Taiwan), December 29, 2025 https://www.cna.com.tw/news/acn/202512290314.aspx