China’s mysterious GDP numbers for 2023
January 17, 2024
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
Editorial board