AbstractAt rifted continental margins, it has been widely reported that the amount of extension measured from faulting is less than the one observed from crustal and lithospheric thinning, referred to as “extension discrepancy.” Here, we use observations from high‐resolution seismic reflection data over the Baiyun Rift to explore the discrepancy between upper and whole crustal thinning factors when the crust of the Northern South China Sea margin thinned from 30 to <10 km. We first restore the rift system of the Baiyun Rift in the absence of post‐rift sediments and water loading. Subsequently, we calculate thinning factors based on fault geometries and crustal thickness ratios to compare the deformation of the upper and whole crust. Our results show (1) in the eastern and western basins, upper crustal thinning factors exceed that of whole crust, showing an inverse discrepancy and (2) upper crustal faulting was sufficient to explain the whole crustal thinning in a narrow area of the basin center, indicating no extension discrepancy. The inverse discrepancy in the western basin results from relatively weak ductile shearing in the lower crust, while in the eastern basin, it is caused by intense sequential detachment faulting in the upper crust. Moreover, lower crust exhumation may trigger magma underplating, which further decreases whole crustal thinning factors. Overall, the hyper‐thinning process of the continental crust beneath the Baiyun Rift is dominated by sequential detachment faulting and is characterized by upper crustal thinning factors equaling or significantly exceeding whole crustal thinning factors.