Hong Kong
CNN Business
—
demon the ruling Communist Party meeting abruptly suspended the release of key economic data a day before its scheduled release. great political meeting in the background a weakening economy.
The country’s National Bureau of Statistics updated its schedule on Monday, with dates for several economic indicators, including closely watched GDP growth, marked as “delayed”. Indicators scheduled for release on Tuesday also include quarterly retail sales, industrial production and monthly unemployment rates.
The bureau did not explain the reason for the delay or set a new publication date.
Separately, the country’s customs authority also delayed the release of monthly trade data originally scheduled for Friday.
The postponement of the highly anticipated date coincides with the week-long 20th National Congress of the Communist Party. Beijingwhere the Chinese leader Xi Jinping he is expected to come to power for the third time, exceeding the norms. The priorities presented at the meeting will also set China’s trajectory for at least the next five years.
“The delay shows that the government believes the 20th Party Congress is the most important thing happening in China right now and wants to avoid another flow of information that could create mixed messages,” said Iris Pang, chief economist for Greater China at ING Group. , in a research note on Tuesday.
Other analysts believe it could be because the data sets aren’t pretty.
“My forecast is another 1.2% decline [on a quarterly basis for China’s GDP]. This would mean that China would join the US in a technical recession,” said Clifford Bennett, chief economist at ACY Securities.
A delay would make sense “from an image management perspective,” he said.Some economists call two consecutive quarters of contraction a technical decline.
China’s GDP fell 2.6% in the second quarter from a year earlier, reversing 1.4% growth in the January-March period. On an annual basis, the economy expanded 0.4% in the second quarter.
Analysts expect growth to remain subdued in the third quarter as tough Covid restrictions, a deepening real estate crisis and slowing global demand continue to weigh on the economy.
Economists polled by Reuters expect China’s GDP to grow 3.4% in the third quarter from a year earlier. This will fall well short of the government’s full-year growth target of around 5.5%.
Many international organizations, including the IMF and the World Bank, recently lowered China’s GDP growth forecasts for this year.
Bennett expected third-quarter GDP data to be released after the Party Congress.
“Every time a release happens, if the world’s two largest economies go into recession this year, we all have to be prepared for a global financial market reaction,” he said.
China’s economy is facing growing challenges. Growth has stalled, youth unemployment is at record highs and the housing market is in shambles. The ongoing Covid lockdowns have not only damaged the economy but also led to growing social discontent.
In a report to the 20th Party Congress released on Sunday, Xi renewed his pledge to transform China into a “middle-developed country” by 2035.
According to Macquarie Group chief China economist Larry Hu, this means China will grow at an average annual growth rate of about 4.7% from 2021 to 2035.
Hu added that the target may be difficult to achieve as the economy faces a number of structural headwinds, such as property declines, an aging population and rising US-China tensions.
