Sat, 03 Dec 2022

Beijing [China], October 20 (ANI): Amid the ongoing 20th Congress of the Chinese Communist Party (CCP), China deferred the scheduled release of its third-quarter economic data sparking immediate speculation of a slowdown in its GDP growth rate.

No explanation was provided for why the data wasn't released as planned on Tuesday. Apart from the overall GDP number, the releases were supposed to include the details of monthly industrial output, energy production, fixed asset investment, property investment and sales, retail sales and housing prices, reported The Sydney Morning Herald (SMH).

The obvious conclusion is that the numbers might have embarrassed Xi had they been released even as the congress was being asked to approve his third term, rubber-stamping an unprecedented extension of his period as party leader.

This year GDP growth rate with estimates of growth of between 3 per cent and 3.3 per cent, would be unlikely to flatter the party leaders, reported SMH.

The International Monetary Fund has forecast growth of 3.2 per cent in China's economy for 2022. The reasons for why China's growth rate has slumped are well understood.

The major one is Xi's harsh zero-COVID policy, which has seen near-continuous rolling lockdowns of China's major cities and industrial hubs. In the second quarter it was a protracted lockdown of Shanghai that was a major factor in the economy's stagnation, reported SMH.

The property crisis, triggered by Beijing's imposition of hard limits to property developers' leverage, has caused an implosion of the developers, a spate of defaults on their debts and a slump in house prices and sales.

There have been spillover effects into other sectors reliant on the property industry and a widespread revolt by mortgagors who had borrowed to fund purchases of apartments before they were built and now find themselves with debts but no apartments. Local governments that rely on property sales for much of their income are also stressed.

Unemployment among 16 to 24-year-olds is nudging 20 per cent and has more than doubled during Xi's current five-year term.

Chinese consumers have become cautious, with retail spending slumping and the slowdown in the rest of the world is threatening its exports, reported SMH.

For the first time in living memory China's economy might grow at a lower rate than the rest of the emerging economies. That's hardly outstanding.

Confirmation of anaemic growth in the middle of the congress to confirm Xi's coronation would introduce a sour note to the celebrations. It might also lead to some cynicism about the prospect of Xi delivering on his promise - reiterated on Sunday - to grow China to the point where it would be classified as a "medium-developed" country by 2035, reported SMH.

Given all the headwinds China's economy is facing and Xi's continuing commitment to stringent responses to COVID outbreaks it perhaps isn't surprising that anything less than positive news about the state of the economy would be delayed until the congress has concluded and his continuing leadership confirmed. (ANI)

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