Although the real estate market continues to be sluggish and consumer spending has almost stagnated, China's official data shows that the GDP (gross domestic product) growth rate in the first three quarters of this year still reached 4.6%, causing outsiders to question its accuracy. The Wall Street Journal (WSJ) reported that economists warned that without reliable and transparent statistical data, it will be more difficult to make sound investment and policy decisions, both in China and overseas.
Some Western analysts predict that China's GDP growth rate for this year will be between 0% and 3%, which is far lower than China's official target of 4.5% to 5%. Several other Chinese economists believe that the official unemployment rate data masks a more serious employment crisis.
Daniel Rosen, co-founder of Rhodium Group, an independent research institution, said: "In such a large major economy, China's macro data has such serious problems that there are almost no other comparable cases."
The gap between China's official data and some independent estimates highlights Beijing's heightened political sensitivity to economic woes. China's huge real estate market is still in decline, many manufacturers are struggling to survive in fierce price competition, and households are unwilling to spend, which makes China highly dependent on exports to support economic growth.
Under Chinese leader Xi Jinping, Beijing has suppressed negative comments about the economy and restricted access to economic data. Much of the data that researchers and investors used to refer to has disappeared. Beijing's recent tightening of controls has exacerbated existing information gaps and made it more difficult for outsiders to cross-check China's official data.
Research firm Capital Economics estimated based on a self-developed index that China's GDP growth rate in the third quarter was 2%, which is far lower than the 4.5% officially announced by China. The company's model uses hundreds of official data from lower-profile sources, such as intercity passenger traffic and industrial electricity use, which are less easily manipulated.
Julian Evans-Pritchard, a China expert at Capital Economics, said that whenever the Chinese government has difficulty achieving its growth targets, the gap between the company's estimates and official data will widen. Similar situations also occurred during the 2008 global financial tsunami, the 2014 real estate market downturn, and during the COVID-19 epidemic. Under the epidemic lockdown, China reported a growth rate of 2% to 3%.
Some analysts are more pessimistic in their assessment of China's economy. Rhodium Group predicts that China's GDP growth rate this year will be around 0%, and believes that it is impossible for China to achieve 4.5% growth when retail sales growth is weak and fixed asset investment has dropped significantly.
In addition, a growing number of Chinese economists believe that the official unemployment rate data masks a more serious employment crisis. A well-known economist at Tsinghua University in Beijing estimated in July that the broad urban unemployment rate would be 10.2% if those who have not found a job in the past two years and are not included in official data are included. Chinese official data showed that the urban unemployment rate fell slightly to 5.2% in September.
Zhu Tian, deputy dean of Shanghai China Europe International Business School, wrote in September that the number of people applying for unemployment insurance benefits is increasing, while the unemployment rate has been relatively stable since 2021. The official unemployment rate is too stable and has little actual reference value.
