BEIJING – Concerns are escalating over the reliability of China’s official economic data, highlighted by reports of internal dissent being suppressed and increasing restrictions on data access. The situation raises questions about the true state of the world’s second-largest economy as it navigates a period of slowing growth and structural challenges.
China’s National bureau of statistics reported 5 percent economic growth for 2024, exceeding the 2.8 percent growth recorded in the United States during the same period. Though, a growing chorus of analysts, both within China and internationally, suspect these figures are inflated to maintain a positive perception of the Chinese economy and the ruling Communist Party’s performance.
In December 2023, an economist at the China Investment Corporation (CIC), a state-owned sovereign wealth fund, publicly stated that the actual growth rate was likely substantially lower than the official 5 percent. Sources familiar with the matter report that president Xi Jinping reacted with anger to these comments and ordered disciplinary action against the economist, whose name has not been officially released but is widely circulated within financial circles as Zhang Yixin. This incident underscores a pattern of suppressing dissenting voices regarding economic assessments.
This suppression extends beyond individual economists. Over the past several years, Chinese government departments have increasingly curtailed the publication of certain economic reports, including detailed industrial production figures and youth unemployment statistics – the latter being halted in June 2023 after reaching a record high of 21.3 percent for the 16-24 age group. The release of other data has been delayed or made inaccessible to researchers and analysts outside of China.In May 2023, Wind Information, a leading Chinese financial data provider, restricted access to some of its data for offshore users, further limiting external scrutiny.
Despite these concerns about clarity, some experts suggest that the data China *does* release is becoming increasingly detailed and, in some respects, accurate. This presents a paradox: while access to information is restricted, the quality of the available data is improving. Analysts at institutions like the Peterson Institute for International Economics note that China’s high-frequency data, such as daily electricity consumption and railway cargo volume, are often more granular and timely than comparable data available for many other major economies.
The focus on maintaining a positive economic narrative is deeply rooted in the Chinese political system,where economic performance is closely tied to the legitimacy of the Communist Party. the current economic slowdown, driven by factors such as a property market crisis, declining exports, and demographic challenges, presents a meaningful test for Xi Jinping’s leadership. The suppression of negative economic assessments is seen as a strategy to maintain social stability and prevent potential unrest.