Debunking the fallacy of ‘Chinese economic data less transparent’
Since the beginning of this year, foreign media outlets and institutions have been throwing mud at the Chinese economy by accusing it of a “lack of transparency in Chinese economic data.” Citing cases of individual Chinese provinces revising data from previous years, they claimed that the revisions were due to a previous falsification.
However, on the other hand, institutions such as the IMF have maintained high expectations for China’s economic growth. For example, in early February of 2024, the IMF released a report predicting that China’s economy will grow by 4.6 percent in 2024.
How can we debunk the fallacy of “lack of transparency in Chinese economic data”?
To begin with, China’s economy is currently undergoing a period of structural adjustment, requiring attention to both addressing existing issues and sustaining robust development momentum. It is necessary to consider these two aspects as a whole rather than just looking at one-sided data.
Since 2022, China’s real estate sector has undergone a major adjustment, leading to a continuous weakening of the related industry investment chain and exposing debt risks in some regions or companies. Over the past 20 years, the real estate market has been booming, but the drawbacks brought about by a development model based on high leverage, high debt, and high turnover need to be addressed. Moreover, the interests involved in this industry are very broad.
Even so, at least seven or eight years ago, the government, enterprises, and academia were actively planning for new industries, new models, and new arenas, accumulating a considerable development foundation. Therefore, new growth points have emerged, including newenergy vehicles, lithium-ion batteries, photovoltaic equipment, among others.
The Purchasing Managers’ Index (PMI) for March showed that the PMI has been in the expansion territory for five consecutive months. The Consumer Price Index has moderately rebounded, and exports have also increased. This indicates that the Chinese economy is indeed undergoing structural adjustments, and the process of eliminating the dependence on real estate is also underway. The consistent trend of economic stabilization and recovery persists.
Second, the lack of structural research on China’s economic data, confusing concepts, and oversimplified comparisons all contribute to “selfmisleading” conclusion of the fallacy of
“lack of transparency in Chinese economic data.”
When analyzing economic data, it is important to observe in terms of both amount and structure, as well as the corresponding context. In times of significant economic changes, it becomes even more essential to have structural analysis in mind.
A very typical case is that many foreign media and institutions have claimed that “foreign investment is not coming to China” based on the data from the State Administration of Foreign Exchange (SAFE). In fact, the rules for data statistics by the SAFE and the Ministry of Commerce are different, and from the perspective of both the stock and increment of foreign investment in China, the situation is not negative, and there are even some promising aspects. There is no such thing as “lack of transparency in Chinese economic data.”
Last but not least, foreign media and institutions view the Chinese economy with an ideological bias, deliberately exaggerating and sensationalizing individual cases in an attempt to influence public perception.
Driven by their own sense of superiority, some foreign media and institutions do not accept the reality that the Chinese economy is steadily recovering and can withstand internal and external pressures. They hold biased and skeptical attitudes toward Chinese economic data.
By highlighting the cases of data falsification by some Chinese companies, they magnify external concerns with the aim of influencing the perception of China’s economic governance.
In response, we must not only pay full attention to and legally crack down on the falsification of data by individual companies, continuously improve supervision mechanisms, but also firmly counter the narrative of “lack of transparency in Chinese economic data” by some foreign media and institutions.
For a long time, China’s economic governance and decision-making have been based on seeking truth from facts, relying on data from the National Bureau of Statistics to have a full understanding of objectively existing problems. In recent years, a series of specific measures to boost the economy have been proposed based on these data and changes in the internal and external environment. Therefore, China does not have the motivation to “obscure” economic data.