There have long been doubts about the quality of Chinese economic data, until finally the Chinese government has admitted it.
China's National Bureau of Statistics has said that a county government in Yunnan province "faked" economic data by inflating the value of their output to boost economic figures and faking investment numbers.
According to the Xinhua report, 28 companies in Luliang in south-west China reported a total of 6.34bn yuan ($1bn; £660m) in industrial output value in 2012.
However, initial calculations showed the actual value was less than half of that – 2.8bn yuan.
The companies have provided fake data to "enjoy favorable policies such as securing bank loans".
The report by the Bureau of Statistics said "nice-looking data sheets mean promotion opportunities."
Analysts believe that this issue posed a serious problem for policymakers as they tried to spur a fresh wave of economic expansion.
"They have been making economic policies based on supposition that the official numbers were roughly correct," said Patrick Chovanec, chief strategist at Silvercast Asset Management.
"But if this issue is widespread, and the numbers are inflated, then growth may not have been as strong as it seems and that means policymakers may have underestimated the seriousness of the problems that China is facing," he added.
