China’s crazy numbers fail to ease the jitters
Like everything else in Communist Party-run institutions, the economic line blurs between fact and fiction
Playing the numbers game has become a Chinese craze.
Latest figures from the National Bureau of Statistics showed China’s economy grew by 4.5% in the first quarter compared to the same period in 2022.
A 10.6% jump in retail sales last month fueled the stellar stats euphoria after the lockdown madness of the past two years.
But like everything else in China’s Communist Party-run institutions, the line blurs between fact and fiction.
“[A] 10.6% ‘surge’ in #retailsales happens as #China’s own official gauge for consumer #inflation slows? Nice magic trick,” research group China Beige Book tweeted earlier this week.
Behind the numbers:
- Private investment barely budged.
- Unemployment among 16- to 25-year-olds hit a record 19.6% in March.
- It climbed for the third straight month.
- Industrial production edged higher at 3.9% in March.
- But semiconductor production plummeted nearly 15% in the first quarter from the same period last year.
- Chips are crucial for China’s high-tech push from smartphones to smart cities.
Delve deeper: Still, retail sales and the boost in domestic consumption grabbed all the headlines. Yet the figures were inflated as consumers rushed to buy jewelry, gems and gold.
The feasibility of consumption-led growth in China is gone.
China Chart
Between the lines: “Consumer interest in precious metals [comes] as a potential haven and inflation hedge, as many consumers do not expect low inflation in China to continue,” Ben Cavender, the managing director at China Market Research Group, said as reported by the Reuters news agency.
Big picture: Unemployment and a property market mired in a major slump are also acting as a major drag on China’s economy.
Ticking time bomb: “By June, there will be a new batch [of around 11.6 million] graduates looking for jobs. The jobless condition could worsen further if China’s economic momentum falters,” Raymond Yeung, the chief economist for Greater China at ANZ Research, said as reported by the CNN news network.
China Factor comment: The world’s second-largest economy faces major structural challenges. Unchecked local government debt, bad loans totaling US$78 billion from China’s massive Belt and Road Initiative and a shrinking population simmer beneath the surface.
End game: “The feasibility of consumption-led growth in China is gone. The ship has sailed, and the window has closed for any potential reforms,” China Chart tweeted this week.