China’s Growth Numbers Don’t Add Up, Says Ex-Central Bank Official
By Jake Beardslee ·
December 5, 2024
A prominent Chinese economist and former central bank official has raised significant questions about the accuracy of China's economic data, suggesting potential discrepancies between official figures and economic reality. christina He / Pexels
Gao Shanwen, chief economist at SDIC Securities, has highlighted several inconsistencies in China's economic indicators, particularly focusing on the relationship between GDP growth, employment figures, and consumption patterns. "Among China's aggregate data, the most reliable is price, which can be sampled and is difficult to manipulate by various forces," Gao stated, according to Newsweek, while indicating that other metrics may be influenced by "non-statistical factors." cottonbro studio / Pexels
The analysis comes at a time when China reported 5.2 percent GDP growth for the previous year and set a target of approximately 5 percent for 2024. However, the correlation between economic growth and urban employment, which was historically reliable before the pandemic, appears to have weakened significantly in recent years.
"If we think the employment data is credible, then economic growth is too high," Gao observed. "If we think the economic growth data is credible, then the employment data is too low." Wolfram K / Pexels
The real estate sector remains a particular concern, with ongoing challenges since the Evergrande collapse in 2021. "It has been more than three years now, and it is one of the main reasons for the current economic difficulties," Gao noted. "This is a fact widely accepted by everyone." David McBee / Pexels
Gao's analysis suggests a possible "cumulative overestimation of 10 percentage points, which corresponds to the loss of 47 million urban employed people." His assessment indicates that official growth rates might need to be revised downward by approximately three percentage points to align with other economic indicators such as prices and employment.
Despite government stimulus measures exceeding $1 trillion, the economy's post-pandemic recovery has been slower than anticipated, though recent industrial sector data shows modest improvement. Ágoston Fung / Pexels
