Peeking Under the Great Wall: Uncovering the Economic Secrets China Hides
China's Economy's Current Status: Struggles Persist
The Wall Street Journal has exposed a concerning trend: Beijing has intentionally withheld hundreds of key statistical indicators, making it increasingly complicated to gauge the state of China's economy. Officially, the government remains tight-lipped, attributing their silence to a review of methodology.
For instance, in 2023, youth unemployment soared to an all-time high of 21.3%, a figure that abruptly vanished, replaced by a new methodology that excluded students. Economists are left scratching their heads, as internationally, students searching for work are considered unemployed.
The faith in the stated Official GDP growth figures of 5% per year is dwindling. Some researchers estimate the actual growth in 2024 was a mere 2-3%, whereas Goldman Sachs puts it at a slightly healthier 3.7%.
Access to this vital information has become a privilege, not just for the general public, but for the professionals too. Post the enactment of the data protection law in 2021, many platforms restricted foreign access to statistics, ranging from retail sales to satellite imagery.
In today's data-driven world, economists are turning to creative, alternative sources to paint a more accurate picture of China's economic growth. They analyze box office receipts, scrutinize nighttime satellite imagery, monitor cement plant utilization and electricity consumption, and use location data from mapping services to assess real-time business activity.
The Veil of Secrecy: Censorship as a Tool for Control
In China, control over information has become a reality. Following the abandonment of the "zero COVID" policy in late 2022, data on cremations vanished, a significant oversight given estimates suggesting 1.3 to 2.1 million may have perished from the virus. Simultaneously, authorities started censoring pandemic discussions on social media.
Data relating to the real estate market has also vanished. In 2022, the Beike Research Institute reported that the number of vacant apartments in 28 Chinese cities exceeded that of the US. A few days later, the report was withdrawn, supposedly due to errors. However, analysts are convinced the real reason was political censorship.
Notably, missing data encompasses the debts of toll road operators, the number of new investors on the stock exchange, and mysteriously, information about the size of toilets in primary schools (later restored). Soy sauce statistics disappeared in May 2021 and have yet to resurface.
Manipulation for Power: Why China is Playing Hide and Seek
The Chinese Communist Party has long considered economic growth a cornerstone of its legitimacy. Admitting to issues such as high unemployment, falling birth rates, or rising debt would imply weakness, particularly on the brink of heightened geopolitical tensions with the US. Hence, it seems, Beijing decided: better no data at all than bad data.
Yet, obscuring the reality of problems is not a solution. This is evident on the stock exchange, where data on foreign investors vanished when they began massively withdrawing funds from Chinese assets in the spring of 2024. The stock exchanges of Shanghai and Shenzhen continued to plummet until authorities promised a new support package in September.
In essence, China's strategic censorship and manipulation of economic data could have severe long-term repercussions. Its actions risk eroding trust, not only from foreign investors but also from its own population, mirroring the mistrust and ultimate collapse of the Soviet Union's system under the weight of economic problems.
- The Wall Street Journal's revelation about Beijing withholding key statistical indicators has led to growing doubts about the credibility of China's Official GDP growth figures, with a significant number of economists questioning their veracity.
- The General-News has reported that China's censorship extends beyond economic data, as seen in the disappearance of data related to cremations following the abandonment of the "zero COVID" policy in late 2022.
- In the publishing industry, institutions like the Beike Research Institute have faced political censorship, as evidenced by the withdrawal of a report detailing the number of vacant apartments in 28 Chinese cities in 2022.
- Studies, such as those focused on China's economic growth, increasingly employ alternative sources, like analyzing box office receipts and monitoring nighttime satellite imagery, due to the limited availability of official data, as seen in the case of mysteriously vanished statistics like soy sauce production in May 2021.
