1 The underlying political motives behind the CCP’s high-profile crackdown on data fraud
CCP authorities expose data fraud
April 8
China Central Television program “Focus Report” exposed revenue data falsification efforts by three local governments in Henan Province. They were the authorities of Wuyang County in Luohe City, the authorities of Guancheng District in Zhengzhou City, and the authorities of Zhecheng County in Shangqiu City.
“Focus Report” said that the commerce bureaus and related departments of those aforementioned local authorities adopted highly perfunctory and crude methods to sustain the fabricated figures, including:
- “Concept substitution” (偷換概念): Reclassifying intra-provincial investment as “external capital.”
- Arbitrary data recording: A company’s verbal claim of 4 billion yuan was recorded as 5.8 billion yuan in official statistics, with no effort to reconcile the discrepancy.
- Falsified documentation (using transfer records from previous years [e.g. 2024] as 2025 data):
- “Time-inconsistent” documents (e.g., November reports containing December transaction dates).
- Reliance on single-page corporate statements without third-party asset verification or bank receipts.
- Blind reporting through administrative layers: Grassroots commerce bureaus, under the pretext of “optimizing the business environment,” failed to verify enterprise submissions and effectively reported whatever figures were declared.
“Focus Report” attributed the phenomenon to a distortion driven by unrealistic performance evaluation metrics:
- Escalating targets: The Henan provincial commerce department demanded the lower authorities in cities and counties to increase their annual inbound investment from outside the province quota by 2%–3%.
- Outcome-only assessment: The higher authorities in Henan focused solely on receiving completion (完成數) and growth (增長數) metrics while disregarding underlying economic realities. This gave space to local officials to “counter falsehoods with further falsehoods” (以假對假, i.e. fabricate data in this cases) for political survival.
- Regulatory failure: Provincial-level oversight cited manpower constraints, resulting in weak data verification and a systemic chain of falsification, or “top-down target escalation, bottom-level fabrication, and inadequate provincial auditing” (上級加碼、基層糊弄、省裡核查不力).
“Focus Report” said that the central authorities have characterized the cases in Henan Province as a typical manifestation of “formalism and bureaucratism,” and added that it severely damaged the business environment and distorted decision-making. A total of 25 Party members and cadres were disciplined following the exposure of data falsification. Meanwhile, the Henan provincial commerce department announced that grassroots work units and enterprises are no longer required to collect and report data on inbound investment from outside the province in an attempt to correct the “assessment orientation” at the source and reduce the burden of grassroots administrations.
April 8 to April 13
The PRC National Bureau of Statistics of China issued feedback on the 2025 routine statistical inspections of six provincial-level regions — Tianjin, Jilin, Fujian, Jiangxi, Shandong, and Gansu — as well as six State Council departments, including the Ministry of Industry and Information Technology, Ministry of Civil Affairs, Ministry of Ecology and Environment, Ministry of Water Resources, Ministry of Emergency Management, and the State-owned Assets Supervision and Administration Commission. The NBS previously dispatched 12 inspection teams to those regions and departments between late October to early November 2025.
The NBS said that the feedback of the inspection teams showed a high degree of consistency in political characterization, governance deficiencies, and rectification requirements across all 12 entities. However, the forms of data falsification and regulatory focus differ depending on whether the subject is a central ministry or a local government. Across inspection reports, recurring themes included “deviations in performance evaluation criteria,” “insufficient accountability in preventing falsification,” and “inaccuracies in on-site investigation data.”
i) The inspection reports repeatedly highlight several core problems across both central agencies and local governments that point to structural pressures within the statistical system:
- All feedback noted insufficient implementation of directives related to statistical governance. Local governments, in particular, are criticized for failing to establish a “correct view of political performance,” implying that data falsification is driven by promotion incentives and performance evaluations.
- The most frequently cited issue is the inadequate implementation of responsibility systems for preventing and punishing statistical fraud. Enforcement pressure weakens as it moves down the administrative hierarchy, resulting in ineffective constraints on power.
- Systemic weaknesses are identified in data collection, verification, and evaluation processes, leading to “fragile grassroots statistical foundations.” Notably, incomplete rectification following earlier inspection rounds is repeatedly cited (e.g., in MIIT, Shandong, Jiangxi, and Tianjin), indicating persistent “recurring violations despite corrective efforts.”
- There is a widespread lack of adherence to statistical law enforcement, including inadequate legal education and weak administrative enforcement. In some cases, officials demonstrate a lack of respect for statutory statistical responsibilities.
2. The inspection focus varies significantly depending on the institutional role of the entities involved.
For bodies such as SASAC, MIIT, the MCA, the MWRs, the MEE, and the MEM, the emphasis is on how administrative authority affects statistical integrity:
- MIIT and SASAC were criticized for “insufficient centralized management” (歸口管理發揮不夠) and “weak statistical supervision” (統計監督管理不力), particularly in overseeing large state-owned enterprises and nationwide industrial data.
- SASAC is specifically flagged for inadequate data quality control and weak grassroots statistical capacity, especially regarding the authenticity of SOE investment data. The other ministries were more frequently criticized for shortcomings in fulfilling statutory responsibilities.
For provinces and municipalities such as Shandong, Jilin, Gansu, Fujian, Tianjin, and Jiangxi, the findings focused more directly on distortions in concrete economic indicators:
- Frequent issues are identified in indicators such as industrial value-added above designated size and fixed asset investment. For example, Shandong is cited for “inaccurate project data,” while Tianjin is flagged for discrepancies uncovered through on-site verification (實地調查地區數據失實).
- Reports highlight weak grassroots statistical capacity and direct administrative interference. This indicates that local governments — under pressure from ranking and performance targets — are more likely to exert influence over enterprises and frontline statistical personnel (to engage in data fraud and other corrupt behavior, for example).
- Less-developed regions such as Gansu are specifically noted for the need to “consolidate progress in special campaigns against statistical fraud” (統計造假專項治理成效需鞏固), implying a higher risk of data manipulation aimed at securing fiscal transfers or policy support (from the central authorities).
Our take
1. The “Focus Report” program on data falsification in Henan Province and the NBS’s feedback on routine statistical inspections covering 12 key regions and departments appear to be part of the central authorities’ attempt to spotlight and “rectify” bureaucratic data manipulation. Data manipulation has always been an issue in the PRC, and tends to reflect political problems more so than technical matters.
2. Because the content of “Focus Report” typically reflects the immediate priorities of the leadership in Zhongnanhai, the “naming and shaming” of the three local governments in the recent program is anything but routine. Significant bureaucratic repercussions usually follow such exposure; notably, more than two dozen local officials in those Henan local governments were held accountable for data falsification. Beijing is likely signaling with the program that data falsification will not be treated as a mere administrative “irregularity” and has become a politically intolerable “red line.”
The intensity of Beijing’s “data rectification” effort reflects deeper concerns of the central governments. Local governments appear to be increasingly relying on “statistical arbitrage” as economic pressures mount. This manipulation of data undermines the central government’s ability to grasp China’s economic realities and implement appropriate macro-level control. In the eyes of the central leadership, local officials who fabricate data to secure policy resources and career advancement are effectively eroding central authority through localized rent-seeking behavior.
3. Since the 20th Party Congress, the issue of data falsification in the CCP regime has moved beyond being a purely legal matter to become an action that is governed by “political discipline.” For instance, Article 139 of the Party’s revised regulations on disciplinary actions (中國共產黨紀律處分條例) issued in December 2023 states that statistical falsification constitutes “disloyalty and dishonesty toward the Party,” or in layman’s terms, political betrayal. Under the Regulations, penalties range from warnings to expulsion from the Party, and “performance showcase projects” have been reclassified from violations of mass discipline to violations of political discipline. This signifies that data accuracy has become a hard indicator for assessing officials’ adherence to the “Two Safeguards.” The central authorities are deploying mechanisms akin to “collective accountability” (數字連坐) and “political sentencing” (政治判刑) to impose a strict disciplinary deterrent across the bureaucracy.
4. Despite the central government’s assertive stance, data falsification in grassroots governments remains an inherent outcome of CCP’s authoritarian structure and target-based governance model.
The primary driver of falsification at the grassroots level lies in unrealistic performance targets imposed by the higher authorities. Within a promotion system dominated by quantitative indicators, local officials often have little alternative but to manipulate data. In the Henan case, the so-called “unreasonable assessment targets” that drove lower-level governments to commit data fraud were largely set by higher-level decision-makers themselves.
The central government faces structural limitations in fully eradicating falsification. A comprehensive exposure of long-standing systemic manipulation would undermine the Party’s narrative of having delivered “economic miracles,” thereby damaging its image of being “great, glorious, and correct” and implicating senior officials whose past achievements were built on distorted data. Consequently, Beijing appears to be adopting the strategy of “selective enforcement,” or high-profile crackdowns on conspicuous, low-level cases to preserve the broader illusion of data credibility.
Perhaps most paradoxically, the National Bureau of Statistics — tasked with supervising data integrity — is itself the principal architect of national data manipulation. The NBS’s framing and narrative of the first-quarter 2026 GDP figures serve as a case in point (see here). While the center suppresses “crude falsification” at the grassroots level, it simultaneously engages in more sophisticated and politically calibrated forms of statistical adjustment at higher levels.
5. The timing of this intensified crackdown on data falsification reflects several key political considerations.
First, the central leadership requires clearer visibility into actual economic conditions to avoid policy miscalculations. By eliminating distortions in local data, macroeconomic policies can more effectively penetrate local protectionist barriers, ensuring centralized control over resource allocation.
Second, statistical falsification functions as a highly flexible enforcement tool under the framework of the CCP’s disciplinary regulations. The higher authorities can invoke “failure to prevent falsification” as grounds to remove or discipline non-compliant local leaders or departmental heads, effectively turning it into a mechanism for political consolidation.
Third, state media’s exposure of grassroots data misconduct allows the central government to shift responsibility for economic slowdown and governance failures onto local governments and officials, including blaming “formalism at the local level” and “misguided performance incentives among individual officials.” This represents a classic form of political blame-shifting, aimed at preserving public confidence in the “correctness” of top-level decision-making.
In summary, while the “data rectification” campaign is about pursuing better data at one level, it is simultaneously an exercise in redefining the boundaries of power. But the act of combating falsification itself becomes another form of distortion in a system where “data loyalty” outweighs “data integrity.” When what constitutes “truth” becomes subordinate to political authority, Beijing’s swinging of the disciplinary “sword” at local governments and officials ultimately risks undermining the credibility of the system as a whole.
2 PRC’s new deep-sea atlas could lead to intensifying maritime competition
PRC publishes atlas of deep-sea mineral deposits
April 14
China Geological Survey, a government-owned organization under the PRC State Council, officially released the “Atlas of Subsea Chemical Elements in the Eastern Seas” (東部海域海底化學元素地圖集; henceforth referred to as the Atlas). According to the CGS, this publication represents the culmination of nearly two decades of marine geological surveys in China’s eastern waters, including the Bohai Sea, Yellow Sea, and East China Sea. It also marks the first comprehensive mapping of subsea chemical elements across the entire region.
The CGS said that the Atlas — using data from more than 20,000 sampling sites and integrating machine learning techniques — systematically presents the spatial distribution and concentration characteristics of dozens of elements, including iron, manganese, copper, and rare earth elements. The project fills a longstanding gap in the systematic geochemical mapping of China’s marginal sea sediments. It is expected to support coastal spatial planning, ecological redline delineation, pollution risk management, and offshore mineral exploration, while significantly enhancing China’s influence in global marginal sea research.
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Previously on March 16, the CCP Central Committee’s ideological journal Qiushi published excerpts from a speech by Xi Jinping delivered on July 1, 2025 at the sixth meeting of the 20th Central Financial and Economic Affairs Commission titled, “Promoting the High-Quality Development of the Marine Economy.” In his speech, Xi called for accelerating the building of a “strong maritime nation,” treating ocean space as a new frontier for economic growth.
April 23
The New York Times, citing experts, said that the Atlas highlights “ambitions to mine the ocean floor and underscoring its disputed claims to waters that neighboring nations consider theirs.” The Atlas also gives the People’s Liberation Army a “thorough understanding of the seafloor in strategically important waters, providing an advantage if submarine warfare were to break out.”
Bruce Jones, a naval affairs and foreign policy expert at the Brookings Institution, told the Times that “China is pouring enormous resources in an effort to emerge as a world-leading oceanographic power,” and is closing the gap with the United States, which has historically dominated ocean-science fields. Jones added that the Atlas can be used for science and warfare, “it’s a rare-earth play, it’s a scientific play, and it’s a strategic play all at once.”
Our take
The Atlas reflects the CCP’s broader strategic ambition to establish comprehensive oceanic influence (i.e. resource control, rule-setting, military surveillance, and geostrategic denial), including in the deep sea.
1. The PRC’s approach to global mineral supply chains is undergoing a structural shift. Previously, China paid a significant environmental cost to secure dominance in rare earth mining and processing. As geopolitical tensions intensified in recent years, however, Beijing recognized that reliance on a “midstream processing” position leaves it vulnerable to upstream supply constraints. The Atlas constitutes, in effect, a technological declaration of intent to secure control at the resource origin level in the deep sea.
Against the backdrop of the global energy transition, nickel, cobalt, manganese, copper, and rare earth elements have emerged as “green critical minerals,” underpinning the electric vehicle industry, defense industries, and precision-guided weaponry. While China controls approximately 85 percent of global rare earth processing capacity, it remains highly dependent on upstream sources such as cobalt from the Democratic Republic of the Congo and lithium and copper from Australia and Chile.
The Atlas directly aligns with the PRC’s dual defensive and offensive logic in response to greater decoupling with the U.S. and its allies. By precisely identifying seabed mineral concentrations, Beijing aims to achieve strategic resource autonomy and establish deep-sea extraction nodes that are difficult for Western supply chains to bypass. Research indicates that polymetallic nodules on the ocean floor contain high concentrations of cobalt and nickel, of which large-scale commercial exploitation could fundamentally reshape the global resource power structure.
The Atlas’s coverage of dozens of chemical elements effectively provides Beijing with a “navigation system” for mining operations in both disputed waters and international seabed areas. Compared with traditional exploratory methods, this digitalized approach reduces economic costs and technical risks, potentially granting the PRC a time advantage over Western private mining firms.
2. In the deep-sea domain, geospatial information constitutes strategic military intelligence. Detailed knowledge of seabed chemical composition and sediment structure directly supports the development of the PRC’s naval “underwater defense architecture” and submarine warfare capabilities.
The chemical and physical properties of seabed sediments play a decisive role in the absorption and scattering of sonar waves. The sediment data released by the CGS enables the construction of more accurate underwater acoustic propagation models. This allows the PLA to better assess submarine stealth performance in specific maritime environments, while enhancing anti-submarine detection capabilities against adversarial nuclear submarines.
Such data accumulation lies at the core of Beijing’s maritime strategy. By mastering seabed conditions along the periphery of the First Island Chain, the CCP seeks to transform these waters into a “home-field” environment characterized by asymmetric transparency, thereby offsetting the traditional acoustic stealth advantages of the US Navy.
China’s investment in deep-sea technologies also exhibits a clear “military-civil fusion” pattern. Technologies developed for seabed exploration — such as deep-sea robotics, pressure-resistant materials, and fiber-optic transmission systems — closely overlap with those required for unmanned underwater vehicles. This enables the PRC to conduct exploration activities under the guise of civilian or scientific missions, while ultimately converting the resulting data and technologies into military applications.
3. The survey of the seabed in China’s eastern waters highly aligns with the strategic intent of Xi Jinping’s July 2025 speech published in Qiushi, which explicitly positioned the ocean as a space of “national strategic significance.”
For the CCP, the waters east of Taiwan are a critical battlefield for any plans to achieve “reunification” through aggressive means and potential countering U.S.-Japan intervention. The Atlas’s detailed mapping of the eastern seas — including areas adjacent to Taiwan — carries clear tactical implications. Mastery of seabed features enhances the feasibility of maritime blockades while laying the data foundation for future underwater ambush operations and anti-access/area denial (A2/AD) strategies.
At the same time, the PRC’s active engagement within the International Seabed Authority (ISA) extends beyond resource acquisition to the contest over defining “scientific standards.” By taking the lead in publishing systematic deep-sea geochemical maps, Beijing is seeking to elevate its data architecture into an internationally recognized benchmark. In the realm of international deep-sea governance, such “technical barriers” could be leveraged in the future to marginalize competitors or to shape environmental and regulatory standards in ways that align with Beijing’s strategic interests.
4. Despite its expansive vision, the PRC’s maritime strategy faces mounting constraints as of 2026:
i) The CCP suffered a significant setback at the March 2026 ISA meeting. Due to widespread international concern over the environmental impact of deep-sea mining, multiple nations called for a moratorium on such operations. Furthermore, in December 2025, China Minmetals Corporation reported that its deep-sea collection equipment was damaged by extreme sea conditions; this suggests that the CCP still faces massive engineering bottlenecks despite its propaganda of possessing “leading technology.”
ii) In April 2026, the Japanese government accelerated revisions to its national security documents, focusing on filling the “Pacific defense vacuum.” This directly targets the anomalous activities of Chinese survey vessels near Guam and the Ogasawara Islands. Meanwhile, the U.S. is utilizing a $12 billion special fund to accelerate its own deep-sea mineral extraction and processing technologies; Washington is likely preparing to decouple more fully from China in this new deep-sea resources “battlefield.”
iii) The frequent disabling of AIS (Automatic Identification System) by Chinese survey vessels (such as the Xiang Yang Hong 06) in sensitive military zones has alerted the world to the CCP’s pattern of engaging in so-called “pseudo-scientific, real reconnaissance” (偽科學、真偵察) marine operations. While this yields short-term battlefield environment data for Beijing, it has resulted in a severe trust deficit among China’s neighbors and other members of the international community, drastically shrinking the PRC’s space for international maritime cooperation.
5. The CGS’s Atlas marks the extension of the CCP’s global expansion strategy from the surface to the deep sea. Beijing seeks to transform the deep sea into a “second territory” through digital mapping and technological integration, thereby countering Western supply chain containment. This represents a multidimensional contest encompassing resource control, geospatial intelligence, and rule-making authority. Therefore, the Atlas serves both as a blueprint for the PRC’s maritime ambitions and as a potential catalyst for the next phase of global maritime competition.
The CCP’s deep-sea strategy, however, faces structural constraints in the form of technical fragility, the global consensus on deep-sea ecological protection, and coordinated counter-measures from the U.S. and its allies like Japan. Over the next five years, the deep sea will likely become the most clandestine yet critical arena of Sino-U.S. technological and military competition. Whether Beijing can translate the chemical elements on a map into actual national power depends not only on its administrative efficiency but also on its resilience in the face of global normative resistance.
