If you had visited China’s National Bureau of Statistics in the days following Xi Jinping’s election as General Secretary of the Chinese Communist Party in 2012, you would have found a cornucopia of economic data.
The number of employees in the outdoor playground amusement equipment sector, the export of natural gas from Guangdong to other provinces, the electricity balance of Inner Mongolia. You name it, they published it, along with more than 80,000 other time series.
But just a year later, these three series and thousands more were no longer updated. Go to 2016, and more than half of all indicators published by the national and local statistics agencies had been quietly phased out. The disappearances have indeed been remarkable.
Seen against this background, this week’s decision to postpone indefinitely The release of headline indicators for the third quarter, including gross domestic product, looks less like a surprise: it continues a trend toward statistical opacity as China shifts from continued high growth to more modest numbers. The blackout is just one of many signals that whatever figure emerges is improbably high – and it can be treated with skepticism in any case.
Aside from the fact that evidence of good performance is usually not hidden, many of the more granular data sets were previously used by analysts to check against China’s main indicators, often finding that GDP numbers overstated performance. We are left with increasingly unconventional indicators to measure China’s current performance. It does not look good.
In striking new research, Luis Martinez, an economist at the University of Chicago, used data on nighttime light intensity from satellite images to show that Chinese GDP growth over the past 20 years may have been about a third slower than reported each year, leaving its economy significantly smaller than the US, rather than something larger.
Regarding real-time indicators that we have become familiar with during the pandemic, such as public transport use, traffic congestion and flight volumes, they offer a reason why China’s GDP figure was missed. With nearly one in five of its over-80s still unvaccinated, compared with about 7 percent in the US and virtually zero in the UK, China’s quest for zero Covid is putting sustained downward pressure on output. Closer to pre-pandemic activity levels than any other country in early 2021, China is now among the laggards, at about a third lower than normal.
Based on the relationship between previously published Chinese GDP figures and data collected by The Economist, the Federal Reserve Bank of New York and flight tracking site Airportia, I estimate that China’s third-quarter growth figure will be around 3 percent, significantly lower than the 5.5 -percentage target and in the lower part of the latest forecasts. Apply Martinez’s satellite-based adjustment for exaggeration, and it comes to 2.7 percent, just half the target.
If reality falls this far short of expectations, we could see another chunk of Chinese economic statistics disappear.
john.burn-murdoch@ft.com
@jburnmurdoch
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