Beijing’s Unusual Delay in Releasing Economic Numbers Fuels Speculation

Experts: China headed for recession despite official optimism

People walk across a bridge with a stocks indicator board in the financial district of Lujiazui in Shanghai on Oct. 17, 2022. Hector Retamal/AFP via Getty Images

China’s Bureau of Statistics finally released third-quarter economic data on Oct. 24, after an unusual delay prompted speculation about the state of its economy.

The numbers were originally scheduled to be released during the 20th National Congress of the Chinese Communist Party (CCP), which ran Oct. 16–22. Authorities postponed the release of key data such as China’s GDP unexpectedly and without explanation.

Analyzing the delay, experts anticipated the numbers would be poor, indicating that China could be headed for a recession.

Justifying this lack of confidence, while third-quarter data showed China’s GDP rose 3.9 percent, on Oct. 27 the bureau admitted that from January to September profits of industrial enterprises above the national scale fell 2.3 percent.

The release of data including third-quarter GDP and economic performance from July to September was originally scheduled for Oct. 18 but was postponed by almost a week. In addition, the General Administration of Customs didn’t publish September’s import and export statistics (pdf) on Oct. 14, as expected.

The delay, which is unusual for the CCP, attracted widespread public attention.

George Magnus, formerly chief economist at UBS Investment Bank and now a researcher at Oxford University, told The New York Times on Oct. 18 that in nearly half a century of tracking China’s economic data, he had never encountered a similar delay in releasing a large number of statistical reports, even in times of epidemics and emergencies.

Spin Control

In what looked like spin-control, Zhao Tonglu, director of the bureau’s national economic accounting department, posted an article on Oct. 24 stating that “the economy ran well in the third quarter and developed steadily, with a 3.9 percent year-on-year increase in GDP.”

Tonglu’s optimism contrasts with China’s inconsistent economic numbers in recent years. China’s GDP contracted by 6.8 percent as recently as the first quarter of 2020. Its economy was up by a mere 0.4 percent in the second quarter of this year.

Dr. Frank Tian Xie, John M. Olin Palmetto Chair Professor in Business and Professor of Marketing at the University of South Carolina Aiken, told The Epoch Times he believes that the hold-up in releasing the data was clearly related to the CCP congress.

The data was not satisfactory to Chinese authorities, said Xie, adding, “If the data was good and shiny, it would have been a ‘gift’ to the 20th congress as a political achievement to boast about.” However, he said, revealing less than satisfactory data during the CCP congress would have put the ruling party in a bad light.

World’s Expectations Not Aligned With Official CCP Outlook

Xie said that the world’s institutions and media see China’s economy as deteriorating. “The government failed to do well in terms of GDP growth, exports, employment, or the housing market and almost all social and economic areas.”

An investor views stock prices on monitors at a securities company in Changchun of Jilin Province, China, on May 28, 2007. China Photos/Getty Images

In March, the Chinese authorities said they anticipated a 5.5 percent annual GDP growth target, but outside expectations were less optimistic. In October, the International Monetary Fund (IMF) revised its growth forecast for China’s economy in the next two years, lowering its forecast for China’s 2023 GDP to 4.4 percent from the original 4.6 percent. The IMF stressed that the premise for growth is that China will gradually lift its anti-COVID restrictions.

According to the IMF, China’s economy grew almost to zero in the second quarter. Its annual growth rate is expected to reach 3.2 percent this year, down 0.1 percentage points from its forecast in July. That would be China’s second-lowest growth rate since its “reform and opening up,” only slightly higher than in 2020, when China dealt with the full onslaught of COVID-19.

The IMF report blamed China’s zero-COVID policy for the economy’s downturn, particularly in the second quarter of 2022.  In addition, the real estate sector, which accounts for one-fifth of China’s economic activity, is rapidly declining and is having a significant impact on global trade and economic activity.

Xie believes that China’s economy is already in recession, and this quarter, it looks like the recessionary trend will continue. China is not on track to meet economic targets, even with the IMF’s downwardly revised data, he said.

Falsified Data Muddies the Picture

While the official statistics body was holding off on releasing relevant data, Zhao Chenxin, spokesman for the Development and Reform Commission, boasted on Oct. 17 that “China’s economy clearly rebounded in the third quarter and performed well, and foreign exchange reserves remained above $3 trillion.”

Xie questioned the so-called foreign exchange reserves of $3 trillion. Most of those reserves are actually left in China by foreign investors, he said. In reality, he said, its available funds are probably only a few hundred billion dollars.

The likelihood that China is falsifying economic data adds to the complexity of the situation. Xie expressed his conviction that for the past 20 years, CCP has consistently falsified economic data, and it continues to do so today.