Adrian JohnsonTLDR:
- China is proposing amendments to its laws governing statistics and accounting to impose heavier penalties for falsifying data and financial reports.
- The revisions aim to increase fines and the cost of violations to clamp down on inflated or manipulated economic statistics and financial fraud.
The proposed amendments to the laws governing statistics and accounting in China are aimed at addressing challenges such as data fabrication, ineffective supervision, and low non-compliance costs for offenders. The amendments include fines of up to 10 times any illegal income for businesses and other entities that falsify data or financial reports. The revisions also require local authorities, statistical agencies, and department heads to not request, imply, or guide the submission of false data, with offenders facing punishment and public naming and shaming.
In addition, the amendments increase fines up to 500,000 yuan for entities that refuse to provide or delay data submissions. These changes come as Beijing seeks to crack down on local officials inflating or manipulating economic statistics like GDP and debt, in order to ensure genuine and reliable data for decision-making and policy design. The amendments to the Accounting Law also aim to tackle financial crimes, including falsifying accounts and lack of internal audits among listed companies.
Overall, the amendments seek to protect market order and uphold rules in the world’s second-largest financial market. The revisions align with China’s efforts to improve the quality of listed firms, restore confidence in the markets, and reduce financial fraud through stricter penalties and supervision.
