Recently, official economic data from the Chinese Communist Party (CCP) have been very “bright”, as if to create the impression that China is the only economy in the world that has escaped the impact of the CCP virus and that the Chinese economy is recovering. In response, a research report by a local Chinese financial institution shows that China’s domestic demand and consumption are weak, the foundation of China’s economy is not solid, and there are many challenges ahead.
Income outlook is not optimistic residents’ willingness to consume is low
Taiwan‘s “Free Finance” quoted the U.S. financial media “CNBC” as reporting on Dec. 21 that Bruce Pang, head of macro strategy research at Chinese investment bank China Renaissance, said in its latest research report that China’s manufacturing investment and private sector rebound is not strong enough, and domestic demand and consumption rebound is generally slower than expected, indicating that the foundation of economic recovery is not solid, and there are still many challenges ahead.
According to the report, Chinese people’s expectations for future income conditions are not optimistic and their willingness to spend is low, with consumption in the first 11 months of 2020 down 4.8% from 2019. Recently, China’s economy has been mainly driven by exports as overseas demand has rebounded, but the sustainability of exports and the stability of employment remain a concern.
Official Chinese Communist Party unemployment rate underestimated
Many Chinese data have embellished moisture or special calculation bases, and the credibility is questionable, Wu Ming-ze, an associate researcher at Taiwan’s WIAC, told Voice of America on Dec. 15.
According to the National Bureau of Statistics of the Communist Party of China, China’s urban survey unemployment rate has continued to fall this year, standing at about 5.3 percent in October, and the job market has gradually improved after the epidemic.
In this regard, Wu Mingze believes that this data is seriously distorted.
Wu Mingze said, “China’s unemployment rate can’t be only 6%-7%, it should be at least 10%, 10%-15%, all possible.” First, the Chinese Communist Party officially does not do unemployment surveys for rural China, and there is no official data on the unemployment rate of migrant workers; second, the situation of foreign business evacuation in mainland China is quite serious.
Chinese people’s annual leisure spending less than 1,000 yuan can hardly support economic growth
On November 9, the Chinese Academy of Social Sciences released a questionnaire survey showing that the average annual leisure spending of Chinese nationals within the past year was RMB 5,647. Among them, 22.7% spent RMB 1001~3000, 10% spent RMB 3001~5000, and 11.1% spent RMB 5001~10000. 11.8% spent more than RMB 10000, but 44.4% spent only one-tenth of the annual leisure spending of high-income groups, which was below RMB The number of people who spend less than RMB 1,000 a year on leisure
According to Voice of America’s calculations, based on the poll’s results and compared to China’s total population of 1.4 billion, this translates to 620 million people spending only RMB 83 per month on leisure, or two sets of Angus thick beef and bacon burgers at McDonald’s.
With this level of consumption, many analysts are not optimistic that China will have to rely on expanding domestic demand to support its economy in the future, according to the report.
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