China has abruptly delayed the release of key economic data, a day ahead of its scheduled release, as the ruling Communist Party convenes in a major political meeting amid a faltering economy.
The country’s National Bureau of Statistics updated its calendar on Monday, with the dates for a range of economic indicators – including closely watched GDP growth – marked as “lagged”. The indicators, slated for release on Tuesday, also include quarterly retail sales, industrial production and monthly unemployment rates.
The bureau did not give a reason for the delay or set a new release date.
Separately, the country’s customs authorities have also postponed the release of monthly trade data, which was originally due to be released on Friday.
The much-awaited data delay coincides with the week-long 20th National Communist Party Congress in Beijing, where Chinese leader Xi Jinping is set to secure an unprecedented third term in office. The priorities presented at the meeting will also determine China’s trajectory for at least the next five years.
“The delay suggests that the government believes the 20th Party Congress is the most important thing happening in China right now and wants to avoid further information flows that could create mixed messages,” said Iris Pang. , Chief Economist for Greater China at ING Group. , in a research note on Tuesday.
Other analysts think it could be because the datasets aren’t pretty.
“My forecast is for a further decline of 1.2% [on a quarterly basis for China’s GDP]. That would mean China had joined the United States in a technical recession,” said Clifford Bennett, chief economist at ACY Securities.
The delay would make sense “from an image management perspective,” he said. Some economists call two consecutive quarters of contraction a technical recession.
China’s GDP fell 2.6% in the second quarter from the previous quarter, reversing a 1.4% growth in the January-March period. On an annual basis, the economy grew 0.4% in the second quarter.
Analysts generally expect third-quarter growth to remain weak as tight Covid restrictions, an escalating housing crisis and slowing global demand continue to pressure the economy.
Economists polled by Reuters expect China’s GDP to rise 3.4% in the third quarter from a year earlier. This would be well below the government’s annual growth target of around 5.5%.
Many international organizations, including the IMF and the World Bank, recently revised down China’s GDP growth forecast for this year.
Bennett expected third-quarter GDP data to be released after the Party Congress.
“Whenever the release occurs, we should all be prepared for a reaction from global financial markets if the world’s two largest economies are both in recession this year,” he said.
The Chinese economy is facing increasing challenges. Growth has stalled, youth unemployment is at an all-time high and the housing market is in shambles. The constant Covid lockdowns have not only wreaked havoc on the economy but also triggered growing social discontent.
In the report of the 20th Party Congress released on Sunday, Xi renewed his pledge to make China a “middle-developed country” by 2035.
That would mean China needs to grow at an average growth rate of around 4.7% per year from 2021 to 2035, according to Larry Hu, chief China economist at Macquarie Group.
Hu added that the target could be difficult to achieve, as the economy faces several structural headwinds, such as slowing real estate, an aging population and rising US-China tensions.
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