cross-posted from: lemmy.sdf.org/post/46055439
As he prepared to speak at a panel in Washington last December, Chinese economist Gao Shanwen tapped the microphone not once but twice, as though to make sure he would be heard. “We do not know the true number of China’s real growth figure,” he began.
After the Covid-19 pandemic, many people had doubts about the official GDP figures, which Gao thought were overstated. “My own speculation is that in the past two to three years the real number, on average, might be around 2 per cent, even though the official number is close to 5 per cent.”
By January, Gao was no longer chief economist at SDIC Securities, his former employer in Hong Kong. In a WeChat group of Chinese economists, he went quiet. For almost a year, there was no sign of any public appearance.
It is only in recent weeks that Gao has re-emerged, participating in a panel about savings and investment at a conference in Shanghai. His almost year-long silence underlines the intense political sensitivity surrounding China’s economic data.
Over the decades that its growth rates were the envy of the rest of the world, the reliability of its statistics drew scrutiny. But the questions have become even more urgent as the economy has lost momentum amid a property slowdown and trade tensions with the US.
[…]
Rather than addressing past concerns about its data, China has instead increased opacity by discontinuing a number of data series and further restricting access for researchers. At a time when governments, international businesses and financial markets are watching China’s economy more closely than ever, their understanding is deeply constrained.
Eswar Prasad, a professor at Cornell University and former IMF official, points to “opacity in data collection”, “lack of clarity on definitional issues” and “the absence of transparency on sampling methodology” across China’s macroeconomic data.
[…]
On an A-to-D scale for national accounts, the IMF’s 2024 grade for China is C. The measure puts it on a par with India and below Vietnam, which also transitioned from a Soviet-style measurement system in the early 1990s.
Vast quantities of official data are still produced in China and are widely used to compile alternative estimates of economic growth. In some cases, they indicate weaknesses, including recent signs of deflation and falling home prices. The country’s most widely used gauge of investment is negative this year for the second time in decades.
[…]
Following its entry to the World Trade Organization in 2001, China made efforts to upgrade its statistical methods and engage in dialogue, shedding light on the extent of the practical measurement challenges it faced across such a vast and fast-changing economy.
But as the political system has become more closed under President Xi Jinping, especially during his unprecedented third term, which was confirmed in 2022, efforts at outreach have dwindled. Sensitivity over data of all kinds soared during the pandemic and has remained elevated.
[…]
A decade ago, the NBS was relatively engaged with outside researchers. [Now] transparency has in some ways gone backwards. One of the best examples is fixed asset investment, a statistic that dates back to China’s planned economy era.
[…]
China does not publish [quarterly breakdowns of the expenditure approach to GDP, including investment, consumption and net exports, and do not publish subcomponents of those broad categories, which can provide useful insights into what is driving the headline figures].
Emerging Advisors, a consultancy, says that across 40 emerging economies it tracks, only four others do not publish such quarterly data, and they are countries with economies based on hydrocarbons. “We can’t stress enough how abnormal this is for an economy of any significant size,” noted economist Jonathan Anderson in a report this year.
[…]
At a separate speech in Shenzhen last December, which is still censored online, Gao, the Chinese economist, described a breakdown in the relationship between GDP and retail sales, as well as lagging fixed asset investment. He calculated the economic impact of real estate bubbles bursting in other countries and contrasted them to the absence of any impact on China’s GDP figures.
This time, speaking his own language, his tone at times shifted towards deadpan irony.
“Perhaps this phenomenon exceeds our ability to understand,” Gao said, of the various contradictions in the data. “This is possible,” he went on, with a slight raise of the eyebrows. “But . . . we tend to think that we need to consider the growth data more carefully.”