Last weekend, we reported that in order to fool the world into believing that its economy is rebounding nicely and that its people have put that entire coronavirus “thing” in the rearview mirror, Chinese officials ordered a factory owner in one of the country’s provinces to “turn on the machines and consume electricity – in his closed factory which has no workers – or he’ll get ‘a visit’.”
Argh. A Wenzhou-based factory owner tells how district officials are telling him his closed factory (he has no workers) must turn on the machines and consume electricity or he’ll get “a visit”. Higher ups are watching the electricity numbers. The anti-Li Keqiang indicator! https://t.co/PTEBARIDW6
— 优述/You Shu (@You_Shu_China) February 28, 2020
Why must the owner of the empty factory pretend the factory is operating? Because “Higher ups are watching the electricity numbers.” And why are higher ups watching the electricity numbers? Because they know that not only the rest of the world is also watching these numbers, but so is China’s population. And absent a rebound in electricity usage, which remain far below prior years even if it is to power unused machines in empty factories, China can’t hold out hope to pretend that February was the kitchen sink month as the level of economic activity simply will not rise for months… unless of course Beijing orders the local population to simply consume for the sake of giving the outside world it is consuming as if things were back to normal.
Only they aren’t, and as we warned last weekend, “instead of Chinese ghost towns, we now have Chinese ghost factories whose only purpose is to try to fool its population and the world that the coronavirus pandemic, which is still raging in China, is under control and the Chinese economy is back on solid footing. Of course, neither is actually happening.”
Fast forward to today, when China’s own Caixin, a Beijing-based media group, picks up where we left off and after conducting its own investigation, has found that local companies and officials are fraudulently boosting electricity consumption and other metrics in order to meet tough new back-to-work targets.