The rampant Communist pneumonia has had a huge negative impact on China’s economy. Photo shows Wuhan in the midst of city closure.
The National Bureau of Statistics of the Communist Party of China (NBSC) released economic data for 2020 on Jan. 18, with GDP growth of 2.3 percent year-on-year. But industry insiders point out that there are contradictions in the CCP’s data, and it is also clear that the overall consumption of the mainland is still low.
Insiders: Chinese Communist Party revises 2019 data but is ambiguous
Hong Kong’s FactWire reported on Jan. 18 that the latest economic data released by the Communist Party of China (CPC), for example, do not match the sum of the annual and monthly values in the economic database for national fixed-asset investment and total retail sales of consumer goods. Officially, the CCP said national fixed-asset investment rose 2.9% y/y and total retail sales of consumer goods fell 3.9% y/y; however, with reference to previous 2019 data, the two figures should have fallen 5.9% and 4.8% y/y, respectively.
In a note to the 18th economic data, the CPC said it revised the 2019 fixed asset investment data and 2019 total retail sales of consumer goods. However, the Fax News Agency found that the official revised the annual figure for 2019 to 40.80 trillion yuan (RMB, same below), but did not revise the monthly data, which had a cumulative total of 41.16 trillion yuan.
The analysis by Xu Jiajian, a member of the Center for Economic Research at the Hong Kong Institute of Asia-Pacific Studies and an associate professor in the Department of Economics at Clincham University, said the (Chinese) Communist Party did not give a clear account of what data was revised, and it now appears that the data for 2019 was revised downward, resulting in an increase for 2020.
He said, “This time the 2019 data was adjusted to such a low level, (the authorities) to explain why it was lowered, or is it because the original years were wrongly counted, then all (previous values) should be adjusted down, so it is a bit strange.”
“The fax agency asked the National Bureau of Statistics of the Communist Party of China why the “annual data” and “monthly data” of retail sales of consumer goods in the database had different values, and the other side replied that “the cumulative values from January to December and the annual data can never be reconciled” because the two data are reported at different times, with the former being reported in March of the following year after enterprises have settled their accounts, and the latter being reported monthly, which is a snapshot.
When asked about the huge amount of the revision, so that the economic data from the fall to rise, whether it will cause misleading, the other side said they do not know, and said, “because the number is specifically a division is doing, as for how to adjust, adjust how much, this we do not grasp.”
Experts are not optimistic about negative consumption growth in 2020
The aforementioned total retail sales of consumer goods is still negative. 2021, the Chinese economy needs to be wary of an uneven economic recovery, and within aggregate demand, consumption is weak and sluggish overall compared to investment and exports, and has still not returned to normality and parity, said the BBC, citing analysis by Wang Jun, chief economist at Centaline Bank.
Su Yue, an economist at the Economist Intelligence Unit (EIU), said that personal consumption is still the weakest link in the economy. Su Yue expects that until the employment situation continues to improve, it will be difficult to see a significant improvement in consumption.
In late April 2020, Li Xunlei’s team, chief economist at China National Securities, issued a report saying that the epidemic had caused more than 70 million new unemployed people on the mainland and the unemployment rate should be 20.5%, which is much higher than the official Chinese Communist Party report that “the urban survey unemployment rate dropped back to 5.9% in March”.
However, the report was quickly removed from the Internet. At the same time, Zhongtai Securities made a personnel adjustment, removing Li Xunlei from his position as director of the research institute.
The CPC’s GDP growth figures for each quarter, however, jumped from a 6.8% decline in the first quarter to a 3.2% increase in the second quarter of 2020, raising questions.
In addition, Wang Jun also mentioned that there are currently real estate financial risks in the mainland economy and the systemic financial risks behind them. He believes that real estate financial risks continue to accumulate, and the tightening of financing for real estate enterprises has led to various risk issues, which is the biggest “gray rhinoceros” in China’s financial risks at this stage.
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