Chen Qiufa, governor of Liaoning province, has for the first time admitted that the province was involved in submitting falsified financial data at city and county levels from 2011 to 2014.
Chen, while delivering the annual government work report to the provincial legislature on Tuesday, cited a document from the National Audit Office, stating: "Liaoning was involved in large-scale financial deception at city and county levels, which lasted a long time and involved many people."
"It not only misled the central government's judgment and decision-making, but also affected the local people's livelihoods in terms of fiscal transfer," the document said.
Liaoning is a traditional industrial base in Northeast China, whose pillar industries include energy, steel and machinery manufacturing.
Since the 2007 global economic crisis, Liaoning's economy has been hovering at the bottom. Its GDP grew just 0.26 percent, falling from seventh to 10th nationwide in 2015. The first three-quarters of last year saw negative GDP growth.
In 2013, hundreds of provincial people's congress representatives were involved in electoral fraud. The preceding provincial Party chief, Wang Min, was placed under investigation for corruption.
"In the past few years, the province's economic development strategy has deviated far from the policy of the central government, and even from the Party's principle of being practical and realistic. Many officials lied to get promotions," Chen said.
This was backed by a local Party chief, who declined to be named, saying that the false data even led to additional taxes of 1,000 yuan (6) per person in recent years.
"We could not apply any existing economic models to explain Liaoning's situation. The only reasonable explanation is that economic data submitted in the past was not true and there has been deception on a large scale," said Liang Qidong, vice-president of the Liaoning Academy of Social Sciences.
The provincial government promised to intensify inspections of statistics, adding that any official found to be involved in data fraud would be dealt with according to the relevant laws and regulations.