Recent investigations in Henan province have uncovered significant data fabrication in regional economic reporting. Some county-level administrations, under pressure to meet escalating performance targets, have resorted to inventing projects and falsifying statistics regarding inbound investment from outside the province. This practice fundamentally violates principles of factual accuracy.
External investment refers to capital inflows originating from outside a province's borders. Since approximately 2000, many regions in China began prioritizing the attraction of such funds as a key strategy for regional development. This led to the establishment of ranking and reporting mechanisms among provinces, sparking intense competition for projects, resources, and favorable policies. However, this system has, in some areas, resulted in severely distorted and inaccurate statistical reporting.
A striking example was found in Wuyang County, Luohe City, Henan Province. From January to November 2025, the county reported receiving 7.8 billion yuan in external investment. Upon investigation, however, local authorities admitted the actual amount was just over 100 million yuan. When questioned about the 7.8 billion yuan figure, Hu Guanghua, Director of the Wuyang County Commerce Bureau, cited "different statistical calibers" and "oversight in distinguishing between intra-provincial and extra-provincial funds." He referenced the Jindadi (Jinshan) project as an example, where an investment originally planned for Hubei province was incorrectly recorded as external investment for Wuyang after the plans changed.
Public records indicate that Henan Jinshan Group is a local enterprise based in Wuyang County, with Jindadi as its core subsidiary. In January 2022, Jinshan Group established Hubei Jinjiang New Material Technology Co., Ltd. in Hubei. Later, in 2024, the group registered Henan Jinhai New Material Co., Ltd. in Wuyang County—the very project counted as external investment. Investigations confirmed that both Hubei Jinjiang and Henan Jinhai are subsidiaries of Jinshan Group. Li Longlong, a主管 from Jinshan Group's external coordination department, clarified that the investment in Jinhai came entirely from the parent company, Jinshan Group, a local enterprise within Henan, and had no connection to the Hubei project.
This reveals that investments from local Henan enterprises into Henan were incorrectly classified as external funds. Furthermore, the data collection process was deeply flawed. A review of the "Wuyang County External Investment Project Statistics Table" showed that for the Jinhai New Material project alone, the reported cumulative investment by November 2025 was 5.8 billion yuan, a figure starkly inconsistent with the 4 billion yuan reported by the company. Li Longlong stated that the Commerce Bureau only requested the number verbally via phone call, without requiring any formal documentation, electronic records, or stamped verification. The reported number was simply provided over the phone.
The discrepancy did not end there. The official statistical table listed 5.8 billion yuan, while the company reported 4 billion yuan. Examination of the statistics table revealed multiple other instances where enterprise data completely mismatched the evidence provided later. The entire statistical framework was chaotic. Data was reported based solely on verbal enterprise accounts, without verification or supporting documentation, allowing falsified investment statistics to be reported directly to provincial authorities.
Guidelines issued by the Henan Provincial Department of Commerce explicitly require supporting materials such as project contracts, bank transaction records, and asset appraisal reports for external investment statistics. However, these crucial documents were entirely absent from the local commerce bureau's work.
When asked about the source of the remaining approximately 2.7-2.8 billion yuan in falsely reported funds, Director Hu Guanghua admitted they came from 16 intra-provincial investment projects. This meant that nearly the entire 7.8 billion yuan report—77 billion yuan—was虚假. The authorities could only provide evidence for just over 100 million yuan of actual external investment, and even this evidence was riddled with errors. Examples included bank transaction dates from 2024 for a 2025 report, transactions dated December 2025 falling outside the January-November reporting period, a complete lack of bank records for a 10 million yuan investment, and "equipment investment valuations" supported only by unverified statements from companies without third-party appraisal reports.
Director Hu acknowledged failures in the auditing process, admitting a lack of strict monthly verification at the enterprise level to confirm the source and validity of the reported figures.
The problem is not isolated to Wuyang County. An investigation at the Commerce Bureau of Guancheng District, Zhengzhou City, found a monthly report from April to September 2025 stating a Hainan-based enterprise had invested 960 million yuan in a local Henan company. The only supporting document was an investment contract, with no corresponding bank transaction records. Furthermore, signatures on the contract and report were inconsistent, varying between "Ru Yanhui" and "Yan Ruhui" with visibly different handwriting. The enterprise's general manager, Zhang Wen, confirmed that the 960 million yuan never materialized in the company's accounts, describing it as a projected investment for a planned lithium battery industrial park that never commenced. Su Lingen, Deputy Director of the Guancheng District Commerce Bureau, revealed that the data was filled out by the enterprises themselves, and the bureau simply reported whatever number was provided, citing the need to maintain a good "business environment" and "put themselves in the enterprises' shoes."
The core reason for these vast and absurd data discrepancies, as uncovered by the investigation, points directly to grassroots units feeling compelled to falsify data to meet assessment targets imposed from above. Officials from both Wuyang County and Guancheng District expressed frustration over long-standing requirements for annual percentage increases in reported figures, typically around 2-3%, regardless of actual economic conditions. They described a system where targets are decomposed from the provincial to municipal, and then to county/district levels, creating an inescapable pressure to report growth.
When questioned, Jing Peng, Vice Director of the Henan Provincial Department of Commerce, acknowledged that while annual targets and monthly progress reports were intended for "business guidance," they objectively created pressure on lower levels. He admitted awareness of potential data inflation from past spot checks but cited insufficient manpower to verify every project across the province comprehensively.
This situation represents a systemic failure: higher levels escalate demands, grassroots levels resort to deception, provincial verification is inadequate, and county/district levels forgo verification altogether. Each link in the chain bears responsibility, creating a cascade of regulatory loopholes that foster data fabrication. Professor Hong Xianghua from the Central Party School commented that this phenomenon is driven by formalism and bureaucratism, significantly harming economic and social development by creating a false business environment. He urged relevant departments to learn from these incidents.
Recently, a central government office focused on reducing burdens at the grassroots level, in conjunction with the Central Commission for Discipline Inspection, publicized three typical cases of formalism, including the false reporting of external investment in Henan. In response, the Henan Provincial Department of Commerce has conducted deep reflection. Vice Director Jing Peng admitted to a disconnect between the indicator system and practical work, acknowledging failures in meeting high-quality development and burden-reduction requirements. He stated that the requirement for grassroots units and enterprises to report external investment data has been suspended, and new methods will be adopted to more accurately reflect investment outcomes.
Besides Wuyang County and Guancheng District, Zhecheng County in Shangqiu City was also found to have falsely reported over 4 billion yuan in external investment. The combined scale of falsification across these three areas is substantial, making the issue highly representative. The chain of data造假—from cascading performance indicators to the fabrication of data and materials at the grassroots level, coupled with inadequate oversight—is complete. Data falsification misleads decision-making, erodes public trust, and corrupts political conduct. Addressing this requires correcting assessment methodologies, eliminating unreasonable targets, and strengthening supervision and accountability to uphold the integrity of data with rigorous practices.