A top Chinese economist just said what many people suspected: China's official GDP numbers may not be accurate
NEWS | 18 December 2024
A Chinese economist said China's official GDP figures may be higher than actual numbers. He said China's GDP is likely to grow between 3% and 4% in the next three to five years. China faces economic challenges including a real-estate crisis and high youth unemployment. A prominent Chinese economist just said what many people suspected: China's official GDP numbers may not be accurate. "We do not know the true number of China's real growth figure and maybe some other numbers," Gao Shanwen, the chief economist at SDIC Securities, said on Thursday. Many people speculate that "after the pandemic, those numbers may not be so accurate," he said at an event hosted by the Peterson Institute for International Economics in Washington, DC. Gao previously advised the country's policymakers. Gao said China's GDP probably averaged around 2% in the last two to three years even though the official number is "close to 5%," Gao said. "If my speculation is correct, I think it might be more reasonable to expect a growth rate between 3% to 4% in the years to come, for the next three to five years," Gao said. "But we know, and I think, the official number will always be around 5%." China reported 5.2% GDP growth last year and has a growth target of "around 5%" this year — which economists said is ambitious. While there have been long-standing doubts over the veracity of China's GDP data, one economist explained to Business Insider in 2022 that the headline GDP figure is "systematically inflated" due to how it's calculated and that it's unlikely the central government in Beijing manipulates numbers. Chinese youth are 'tightening their belts and eating noodles with the lights off' Gao made headlines recently for his comments at an investor conference about "lifeless" Chinese youths. Chinese censors have since taken the speech off the internet. In the speech, Gao said his analysis of regional data found that the younger a province's population is, the slower its consumption growth. China is now "full of vibrant old people, lifeless young people, and middle-aged people in despair," he said. "Young people are tightening their belts and eating noodles with the lights off," Gao added. Gao's assessment of China's economy comes as the country struggles to recover from pandemic lockdowns. The world's second-largest economy is facing multiple issues, including a real-estate crisis, high youth unemployment, and deflation. China's economy has been holding up this year thanks to robust exports — but the country's consumer demand has been dismal due to poor consumer confidence. Many people are trading down for cheaper purchases. Related stories China's economy is still struggling to recover from the pandemic On Thursday, Xinhua state news agency reported that top Chinese officials planned to loosen monetary policy, increase the budget deficit, and issue more debt to boost consumption and maintain stable economic growth. China's top leaders also pledged to "vigorously boost consumption" and domestic demand "on all fronts," per Xinhua, citing the two-day Central Economic Work Conference led by Chinese leader Xi Jinping this week. Analysts said China's promises to shore up its flagging economy didn't seem to impress investors, particularly since the plans were light on details. China's benchmark CSI300 Index was 1.8% lower at midday, while Hong Kong's Hang Seng Index fell 1.7%. "Due to the property meltdown, the fiscal crisis and worsening tensions with the US, China's economy is not in a normal downcycle, so it may take much more than a 'bazooka' stimulus package to truly reboot the economy," Nomura economists wrote in a note on Friday.
Author: Huileng Tan.
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