A report published by the US Wall Street Journal reported that it has become difficult for analysts and investors in recent years to understand the reality of the economic situation in China, because of what he said was a gradual disappearance of many official data that was previously used to evaluate the performance of the economy.
The report – which was prepared by Rebecca Feng and Jasson Douglas – said that this blackout comes at a sensitive time in which China suffers from great challenges, most notably the debt crisis, real estate contraction, and slowdown, which led the Chinese government to increasing attempts to control the economic narration.
Data disappearance
The report indicates that the Chinese authorities have stopped publishing hundreds of economic indicators, including land sales data, foreign investment, unemployment rates, and even unexpected indicators such as soy sauce production. Data related to burning bodies and business confidence index, all without providing official interpretations in most cases.
The report said that this data was widely used by economists to estimate real growth, in light of the increasing doubt about the credibility of the official official GDP numbers, which the Chinese government put at 5% for 2024.
However, some alternative estimates, such as those issued by Goldman Sachs, indicate growth closer to 3.7% or even 2.4%, according to the report.
Wall Street Journal added that in an increased sensitivity environment, the Chinese government seeks to present a stable image of the economy, especially with the escalating anxiety between the middle class and the deterioration of the labor market among young people.
Impacts on markets and investors
The report considered that what he described is the absence of transparency, cast a shadow on the confidence of the investors. In April 2024, and as economic fears increased, foreign investors withdrew more than two billion dollars from the Chinese stock market in just two weeks.
In a surprising step, the Shanghai and Shanezin exchanges announced the suspension of the publication of immediate data on the movements of foreign investors, which led to more confusion in the markets, the newspaper says.
The newspaper adds that access to some databases from outside China has been restricted, and some institutions, such as Wind Information, have become prohibiting international users access to certain data, forcing some economists to personally go inside China to download information.
The real estate economy is an example
The report indicated that the real estate sector is one of the most prominent crisis sectors. After it was an engine for growth in the past years, this sector has witnessed a widespread collapse since 2021 due to the restrictions on lending.
He said that a report issued in 2022 of the Chinese Research Institute indicated that there was a huge surplus in the residential supply, but a few days later the report was withdrawn and apologized for its content. The official data on land sales that was an important source of local government revenues later disappeared.
The newspaper commented on the “disappearance of data”, saying that this is not only an artistic issue, but also reflects a political approach aimed at controlling the general image of the economy, even at the expense of transparency, as it raises global concern, especially in light of the escalating competition between China and the United States, and the global market dependence on accurate information from the second largest economy in the world.
