The Chinese Economic Bubble will Burst

Contrarian Short-Seller bets against China

For the life of me, I've never understood why when China posts all these too-good-to-be-true growth rates, investors don't consider that China might simply be lying. The government has an absolutely horrible record for honesty, transparency, ethics, and even basic human rights. It's actually a much easier call to make than Enron would have been.

People take it as a given that when countries report trade figures, they're telling the truth, and they're not accustomed to doubting them. They need to learn to make an exception in China's case. It's not a free state, and the government is accustomed to reporting what it wants to report, without being questioned. We assume a free press would call them on it, but the rules aren't the same there.

To give an example, a Canadian prof studied the numbers they posted for fish caught and sold, and figured out that if the figures they posted were actually true, they would have fished out their waters by now. And that's just one example. The government does that with everything.

Fudging numbers almost seems to be cultural at this point. This summer I saw someone I knew from high school who's a marine biology student now and works at a research lab in Vancouver. They hired a Chinese immigrant to look after the fish and help with the experiment on a routine, clerical basis. One of his responsibilities was to record the fatalities each day.

But a funny thing- no fish died on his watch. Ever. Months went by without a single death, which is funny, because a given number would be expected even under entirely natural conditions. It put the data of the whole experiment in doubt. What was this guy, the fish whisperer or something?

They confronted him, and finally he admitted to it. When they asked him why he lied about something so routine, he said he didn't want to lose face. As far as he knew, he wasn't supposed to report deaths, because that would make him look like a bad worker. Just keep the official numbers looking good and everyone's happy, right?
...what? You mean you guys don't work that way?! You mean you just want me to record what really happened?!