A prominent Chinese economist has suggested there are discrepancies in China's official data, questioning the true state of the world's second-largest economy.
The critique by Gao Shanwen, chief economist at SDIC Securities and a former official at China's central bank, comes as many economists question China's officially reported figures and as the country continues to grapple with a property sector crunch, high youth unemployment and a range of other issues.
China reported GDP growth of 5.2 percent last year and set a target of around 5 percent for 2024. However, the People's Daily, a state-run newspaper, recently tempered expectations by emphasizing there is no need to "worship speed."
"Among China's aggregate data, the most reliable is price, which can be sampled and is difficult to manipulate by various forces," Gao said. In contrast, other data, he argued, is more vulnerable to "non-statistical factors."
One area of concern is the relationship between GDP growth and employment. Gao noted that before the pandemic, economic growth reliably translated into increased urban employment. However, he said this correlation has broken down in recent years.
"If we think the employment data is credible, then economic growth is too high," he said. "If we think the economic growth data is credible, then the employment data is too low."
Gao also pointed to irregularities in consumption and investment trends.
Prior to COVID-19, consumption often grew at a rate slightly faster than the overall economy. Since the pandemic, however, economic growth has outpaced both consumption and investment, a relationship he described as "significantly abnormal."
The economist highlighted the persistent challenges in China's real estate sector, a key driver of economic difficulties. The sector has struggled since the collapse of Evergrande in 2021, which marked the bursting of China's property bubble.
"It has been more than three years now, and it is one of the main reasons for the current economic difficulties," Gao said. "This is a fact widely accepted by everyone."
Citing analysis comparing China's situation with other countries that have experienced real estate crises, Gao observed that those nations' economic growth rates declined sharply, averaging -7 percent over three years.
China's GDP dipped to a low of 3 percent in 2022, the year a resurgence of COVID cases prompted the government to impose the longest rolling lockdowns.
Gao suggested a "cumulative overestimation of 10 percentage points, which corresponds to the loss of 47 million urban employed people."
He cited inconsistencies in government data. He said the numbers match up with metrics like prices and employment if the official growth rate is revised down by 3 percentage points.
Newsweek reached out to the Chinese foreign ministry with a written request for comment.
The economy has failed to rebound as strongly as anticipated after the lifting of very strict pandemic controls in late 2022, though the purchasing managers' index for November showed signs of modest recovery in the industrial sector.
Policymakers have announced stimulus measures totaling over $1 trillion to spur growth, though some analysts argue these fall short of what's needed to restore consumer confidence. Gao, who has previously served as an adviser to top regulators, suggested that inconsistencies in official data obscure the real picture.
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