Seek Truth from facts is our basic principle,' declared Ye Zhen, spokesman of Beijing's State Statistical Bureau as he delivered the year-end statistics. But what are the facts? It is to the bureau's credit that while similar organisations around the world are still grappling with third-quarter statistics, Beijing has already wrapped up the full year and declared victory. Mr Ye explained that the 7.8 per cent annual growth figure, compared with the 8 per cent guaranteed by Premier Zhu Rongji at his March press conference, could be known so early because SSB teams throughout the country have been busy carrying out their own surveys. This, he explained, was much better than relying on provincial statisticians. Provincial authorities were subject to the temptation of jacking up growth figures to ensure they reach, and preferably exceed, the targets set by Beijing, he confessed. Yet the SSB's own methods also raise a few doubts. It must, for example, be quite hard for survey teams to determine the value of industrial output of factories which cannot sell their goods or at least not sell them for a profit. Informed talk in Beijing is that the real rate of economic growth is half that claimed by officials. Even if you factor in unrecorded economic activity in the private sector, it cannot be more than 4 per cent growth, it is argued. Western diplomats point to very low and sometimes negative growth in electricity production in provinces simultaneously claiming that industrial output jumped 8, 10 or more per cent. Such statistics are puzzling enough but the biggest question marks hang over the mainland's mysterious forex figures. A year ago, Beijing said it had US$139.9 billion in foreign exchange reserves. Twelve months later, Mr Ye said the country absorbed US$54 billion in various forms of foreign investment and bank loans and was on the way to achieving a US$45 billion trade surplus. Surely then, Beijing should now have about US$240 billion in forex reserves? Mr Ye avoided this topic, saying this was not the SSB's responsibility. But the most recent figures show forex reserves at US$140 billion. Even if you subtract various sums for private forex savings, various kinds of fraud and evasion, and statistical confusion, it still leaves a big hole to be plugged. Could Beijing be making up its investment figures? In recent years, more than 80 per cent of foreign investment has come from neighbouring countries, especially from overseas Chinese operating through Hong Kong. It is hard to believe that such investors have not been badly hit by the crisis and have turned down their inflows. Received wisdom held that the mainland's foreign investment figures were exaggerated but only because a lot of foreign investment originated in the mainland but re-entered via Hong Kong. Mainland cadres running state enterprises and banks found the mainland economy so irresistible they couldn't help re-investing all their spare capital in joint ventures to benefit from the tax incentives offered to foreigners. Perhaps these canny cadres could not help carrying on with this investment strategy despite all the doubts about a possible devaluation. Beijing rumour mills say different. Stories are circulating that in private, officials admit real direct foreign investment is under US$10 billion this year and may not reach US$15 billion next year. To explain away the missing forex reserves, mainland newspapers like the Beijing Economic Daily have begun carrying shocking reports of how some people have been falsifying their figures and diverting vast sums abroad. This week, it said investigators discovered 1,800 cases each involving sums over US$5 billion in the first half of the year. And it said the police were busy uncovering the facts in another 230 cases involving US$3.64 billion and HK$3.99 billion. But who are these people and where are they putting their cash? New York? Eurobonds? Hong Kong flats?