China Research

Those who followed my analysis of Chinese statistics in the past decade or even earlier have probably recognized that I regularly discussed insufficient transparency and quality of Chinese economic statistics (see, for example, https://publications.bof.fi/bitstream/handle/10024/44981/172270.pdf;jsessionid=F1A3B66E65EB4447FC419C2922BE6B7A?sequence=1).

I also wondered frequently after how long time Western analysts really would be able to realize positive statistical changes once the quality of Chinese statistics finally indeed has started to improve – and for how many more years historical doubts could persist in the case of such a positively changing statistical environment.

GDP growth in 2023 by 5.2 percent – as “wanted”?

According to the National Bureau of Statistics (NBS), Chinese GDP grew 5.2 percent compared to 2022. This new number should not be too surprising theoretically after the disastrous covid(-policy) year of 2022 and the very limited GDP growth of 3 percent during the same year. However, when considering the still ongoing problems in the real estate sector, still relatively reluctant consumers and modest global demand, 5.2 percent may appear somewhat high. Can we speak about a politically determined growth number?

Sure, I cannot give a safe answer on this conundrum. No one  outside the most powerful political circles in China can or is allowed to do so. But it should not be overlooked that 5.2 percent is suspiciously close to the official growth target of 5 percent. This result reminds of the exact pre-corona predictability when quarterly GDP changes for quite some time more or less exactly were in line with the needs of meeting the annual GDP objective. Has China now come back to this previous “policy of fine-tuning“?

This question leads automatically to the theory that Chinese GDP growth in reality could have been less than 5.2 percent. May be even at around 3 percent? Such a number would have been, of course, very inconvenient for President Xi Jinping (who also wants to appear as a successful leader of China in BRICS strategies and in the global South). At home, in China, Xi is already overwhelmingly praised, for example right now by the National Bureau of Statistics – as an introduction to the GDP statistics for 2023with the following words:

“In 2023, faced with complex and grave international environment as well as arduous tasks to advance reform, promote development and maintain stability at home, under the strong leadership of the Central Committee of the Communist Party of China (CPC) with Comrade Xi Jinping at its core, all regions and departments strictly implemented the decisions and arrangements made by the CPC Central Committee and the State Council, adhered to the general principle of seeking progress while maintaining stability, fully and faithfully applied the new development philosophy on all fronts, accelerated efforts to foster a new pattern of development, comprehensively deepened reform and opening up, strengthened macro regulation, and redoubled efforts to expand domestic demand, optimize structure, boost confidence and prevent and defuse risks…”.

Now, if the official GDP growth rate of 5.2 percent was exaggerated, the outlook for the global economy may be even more risky this year. An important hint may be given at the annual National People’s Congress by the announcement of the GDP-growth target for 2024 in early March.

Conclusion: There is every reason to keep informed as well as possible about Chinese developments.

Hubert FromletAffiliate Professor at the School of Business and Economics, Linnaeus University
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China is a country with outspoken scientific ambitions, particularly expressed by President Xi Jinping. This is certainly a logical approach in order to achieve the important Chinese goal of “of raising domestic content of core components and materials to 40 percent by 2020 and 70 percent by 2025” which  means that “reducing reliance on foreign technologies involves creating and developing companies that can innovate through research and development, dominate domestically, and produce competitive exports…” (https://isdp.eu/content/uploads/2018/06/Made-in-China-Backgrounder.pdf). To get there, strong technological progress is certainly needed – based on successful scientific research.

“Science” – a key word in today’s China

A few days ago, I saw an article in People’s Daily that made me very curious. The headline was “China surpasses U.S. in publishing most influential academic papers: report” (http://en.people.cn/n3/2023/0921/c90000-20074482.html). According to this report, China counts for almost one third of all academic papers that were published in 2022 in the most influential international journals (i.e. 16348 Chinese contributions out of totally 54 002). Among these publications were 1929 Chinese papers described as “hot” compared to 1592 from the U.S.

Regarding the size and ambitions of academic China, the rise to number one in the publication area may be plausible. However, some questions and uncertainties remain in my mind, particularly since my trust in Chinese statistics has been limited for many years. Some comments should be mentioned according to my understanding of the report (see also more about the publishing institution “Istic” – Institute of Scientific and Technical Information of China, https://www.istic.ac.cn/html/1/529/558/index.html):

• The analysis of giving China the first place in this ranking of global scientific publications is made in China and therefore extremely difficult to go through and check out. At least in my view, transparency still seems insufficient.
• It would be interesting to know which journals that have been selected as high-level international journals and to what extent Chinese journals are included in this ranking process.
• It would be good to be informed about the criteria of a “hot” research paper.

I have been trying during quite a long time to understand more about China’s international research standing. Sure, there should have been interesting progress in the past 10-20 years. But why is access to the details so difficult to find and obtain?

Hubert Fromlet
Affiliate Professor at the School of Business and Economics, Linnaeus University
Editorial board

 

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