China GDP growth of 5% is not overstated
In conditions of large data, manipulations with statistics are becoming meaningless, the Fed’s study showed “whether China is growing by 5%.” Suspicions of “twisting” of official statistics are not uncommon against “ideologically motivated” economies, and the Fed is considered China’s plan in 5% GDP growth in 2025, as a year earlier, high, but alternative estimates confirm the adequacy of such economic dynamics and rather refute the assumption of the possibility of its adjustments.
An alternative indicator of the Chinese GDP, including data on the business cycle, industrial production, retail, real estate market and external supply to China, was developed in 2022 in Barcelona to “check” the official growth of GDP PRC – it was too smooth after the global financial crisis against the background of the reassessment of the PRC economy, which caused the correction of the stock market, Outflow of capital and changes in the rigidly controlled exchange rate. The growth then slowed down at 5 percentage points (from the beginning of 2014 to the beginning of 2015), subsequently “bounced” (see schedule). The fracture falls at the beginning of the pandemic: after a sharp reduction in the Locksu (the first quarter of 2020), the official growth of China GDP has already corresponded to an alternative indicator. In the last quarters, official and alternative indicators show GDP growth by about 5%, that is, official indicators are not overstated, the Fed’s study said.
Such an increase was ensured by world demand – the total contribution of pure exports to GDP from 2020 to 2024 was higher than for any five -year period since 2008, supporting industrial production. After the first locaunes, China minimized interruptions in supplies thanks to the strict policy of “zero tolerance to Covid” and methods of control of a closed cycle. However, long restrictions reduced consumer activity – retail sales were unchanged from 2020 before the abolition of anti -icing measures at the end of 2022, and growth rates remain below the dopandemic trend, the Fed said. The crisis in the real estate sector also influenced consumption: since August 2020, housing construction and sales have fallen by more than 40% and 70%, while three quarters of the wealth of Chinese households are tied to real estate.
The Fed, however, doubt the stability of the growth of Chinese GDP against the background of trade tension. To maintain five percent growth of China, it is necessary to strengthen consumption – the plan for its support has already been announced, but so far it does not demonstrate noticeable results.
