China faces an economic headache after the Party
Disappearing data is unlikely to pop up until after the 20th National Congress big bash in Beijing
Dodgy data has been a symptom of China’s economic weakness even before the Covid-19 pandemic. But now, it appears the numbers are so bad Beijing has stopped releasing them.
Nothing, it has been suggested, will overshadow the Communist Party’s feel-good factor at this week’s 20th National Congress in the Great Hall of The People.
Instead, the National Bureau of Statistics has delayed releasing third-quarter GDP data, quarterly retail sales, industrial production and crucial monthly unemployment figures.
Property investment and sales along with home prices have also been put on hold, as well as trade stats.
“China abruptly delayed publication of its Q3 GDP data [on] Monday, a day before it was set to be released, an unusual move as the Party stages a key political gathering … The website didn’t provide a reason for the delay or say when the data would be released,” China Beige Book, a research company, tweeted.
Numbers lottery:
- GDP growth looks certain to fall well short of the official target of 5.5%.
- The International Monetary Fund and the World Bank have already downgraded their forecasts for this year.
- In the second quarter, GDP dropped 2.6% compared to the first three months.
- That reversed an anemic 1.4% jump during the January-to-March period.
China delaying its Q3 GDP release says all you need to know about the status of the economy.
Nick Marro, of the Economist Intelligence Unit
Delve deeper: President Xi Jinping’s controversial “zero-Covid” policy and flash lockdowns across China have wreaked havoc on the economy. They have also triggered social unrest and online anger.
Between the lines: Unsustainable local government debt, a meltdown in the property sector and soaring unemployment among the young have only fanned the flames of discontent in a country crying out for change.
Big squeeze: The depth of the crisis has been highlighted by a report that China’s provincial-level regions face a US$1 trillion black hole in their finances. News agency Reuters calculated that in “the first eight months” the “gap between general public revenue and expenditure totaled 6.74 trillion yuan or $948 billion.”
State of play: “China delaying its Q3 GDP release says all you need to know about the status of the economy,” Nick Marro, the global trade lead at the Economist Intelligence Unit, said on Twitter.
Economic turmoil: Robin Brooks, the chief economist at the Institute of International Finance, went even further, illustrating the turmoil engulfing the world’s second-largest economy.
Ground zero: “China’s growth in the first half of 2022 was so weak that it leaves annual average growth for this year at just 0.5% if you assume zero GDP growth in Q3 and Q4. Only three countries have 2022 GDP growth that’s worse than China: Russia, Sri Lanka and Ukraine,” he tweeted.
China Factor comment: The veracity of the data compiled by the National Bureau of Statistics has always posed problems for economists. Even the powerful State Council has admitted that. Still, the true cost of bungled policies will be brought into sharp focus as the risk of a global recession rises.