http://profitableinvestingtips.com/stock-investing/investing-when-chinese-economic-data-is-faked Investing When Chinese Economic Data Is Faked One of the common pitfalls in offshore investment is inaccuracy of the information you use to analyze investments. This may be because you are investing in a third world country that does not keep the data you need. Or in can be because you are investing in a country like China where economic data is often faked. Investing when Chinese economic data is faked is a genuine concern as reported by Business Insider of Australia. They have published an article stating that Chinese officials admit to faking economic data. Even a time of heightened uncertainty, there’s one thing a majority of markets agree upon: Chinese data is unreliable, particularly figures released by regional governments. Making the case for market mistrust, a report from Xinhua, a state-run government news agency, released over the weekend stated that “several” local officials in China’s Northeast region admitted to faking economic data in recent years to show high rates of growth when the real numbers were much lower. According to the China Daily website, citing Xinhua, several officials acknowledged they had significantly overstated data ranging from fiscal revenue and household income to GDP. “If the past data had not been inflated, the current growth figures would not show such a precipitous fall,” one unnamed official told Xinhua, attempting to explain why growth rates across the region were now among the lowest in the country.

1. By www.ProfitableInvestingTips.com

2. One of the common pitfalls
in offshore investment is
inaccuracy of the information you
use to analyze investments.

3. This may be because you are
investing in a third world country
that does not keep the data you
need.

4. Before We Continue…
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5. Or in can be because you are
investing in a country like China
where economic data is often
faked.

6. Investing when Chinese economic
data is faked is a genuine concern
as reported by Business Insider of
Australia.

7. They have published an article
stating that Chinese officials
admit to faking economic data.

8. Even a time of heightened
uncertainty, there’s one thing a
majority of markets agree upon:

9. Chinese data is unreliable,
particularly figures released by
regional governments.

10. Making the case for market
mistrust, a report from Xinhua, a
state-run government news
agency

11. released over the weekend stated
that “several” local officials in
China’s Northeast region admitted
to faking economic data in recent
years to show high rates of
growth when the real numbers
were much lower.

12. According to the China Daily
website, citing Xinhua, several
officials acknowledged they had
significantly overstated data
ranging from fiscal revenue and
household income to GDP.

13. “If the past data had not been
inflated, the current growth
figures would not show such a
precipitous fall,” one unnamed
official told Xinhua, attempting to
explain why growth rates across
the region were now among the
lowest in the country.

14. If investing when Chinese
economic data is faked were not a
serious issue for investors this
would be funny!

15. Regional officials were rewarded
for falsifying information that
made the Chinese economic
miracle seem even more
miraculous.

16. Now, when the Chinese economy
is going to Hades in a hand
basket, officials “admit” that the
“real” numbers were substantially
lower.

17. Thus, the argument goes, things
are not really all that bad because
the economy was already slow and
this year it has not fallen all that
much farther.

18. Where does an investor look for
accurate information?

19. Is it wise to simply avoid Chinese
stocks?

20. How about the effect that China
has on developing economies and
the global economy in general?

21. When the Numbers Do Not
Make Sense

22. In the run up to the dot com
market crash famed investor
Warren Buffet said that he had
gotten out of every stock
(including dot coms) that he did
not understand.

23. This is the most successful
investor in the world who insists
on understanding how a company
makes money and how it will
continue to make money before
investing a single cent, not to
mention a few billion dollars.

24. To the extent that a Chinese stock
trading as an ADR in the USA is
affected by poor economic
numbers it is time to sell.

25. To the extent that the data is
meaningless it is past time to sell.

26. Chinese exports and imports are
both falling.

27. And some analysts
are questioning the stability of
China’s economy as reported
by Bloomberg Business.

28. [VIDEO] Richard Haass, president
at Council on Foreign Relations,
discusses the stability of a
Chinese economy in transition and
question marks surrounding the
Middle East. He speaks on
“Bloomberg Surveillance.”

29. The issue of most concern for
those who are invested in China is
political stability.

30. China has change dramatically
since opening to the West in the
Nixon era.

31. The Chinese people are certainly
aware that their government is a
dictatorship.

32. But, so long as prosperity
continued people were willing to
ignore the lack of freedom.

33. The concern for the leadership is
how to maintain control when the
economy continues falter.

34. At what point will political unrest
become a major issue?

35. Social instability in China would
be a more serious concern than
investing when Chinese economic
data is faked.