Hong Kong
CNN Business
—
Porcelain has abruptly delayed the release of key economic data, a day before its scheduled release, as the ruling Communist Party meets in an important political meeting in the context of a faltering economy.
The country’s National Bureau of Statistics updated its timeline on Monday, with the dates for a number of economic indicators, including closely watched GDP growth, marked as “lagging.” The indicators, due for release on Tuesday, also include quarterly retail sales, industrial production and monthly unemployment rates.
The office did not give a reason for the delay or set a new publication date.
Separately, the country’s customs authority also postponed the release of monthly trade data, which was initially scheduled to be released on Friday.
The long-awaited data delay coincides with the week-long 20th National Congress of the Communist Party in beijingwhere the chinese leader Xi Jinping he is expected to secure a norm-shattering third term in power. The priorities laid out at the meeting will also set China’s trajectory for at least the next five years.
“The delay suggests that the government believes the 20th Party Congress is the most important thing happening in China right now and would like to avoid other information flows that could lead to mixed messages,” said Iris Pang, chief economist for the Greater China. China at ING Group. , in a research note on Tuesday.
Other analysts think it could be because the data sets are not pretty.
“My forecast is for a new fall of 1.2% [on a quarterly basis for China’s GDP]. This would mean that China has joined the US in a technical recession,” said Clifford Bennett, chief economist at ACY Securities.
The delay would make sense “from an image management perspective,” he said. Some economists call two consecutive quarters of contraction a technical recession.
China’s GDP declined 2.6% in the second quarter from the previous quarter, reversing 1.4% growth in the January-March period. In year-on-year terms, the economy expanded by 0.4% in the second quarter.
Analysts widely expected third-quarter growth to remain weak as tight Covid restrictions, a deepening crisis in the real estate sector and slowing global demand continue to pressure the economy.
Economists polled by Reuters had expected China’s GDP to expand 3.4% in the third quarter from a year earlier. That would be well below the government’s annual growth target of around 5.5%.
Many international organizations, including the IMF and the World Bank, have recently lowered China’s GDP growth forecasts for this year.
Bennett expected third-quarter GDP data to be released after the Party Congress.
“Whenever the release happens, we all need to be prepared for some reaction from the global financial market if the world’s two largest economies are in recession this year,” he said.
China’s economy is facing increasing challenges. Growth has stalled, youth unemployment is at a record level, and the housing market is in shambles. The constant Covid lockdowns have not only wreaked havoc on the economy, but have also led to growing social unrest.
In the report of the 20th Party Congress released on Sunday, Xi renewed his commitment to making China a “middle-developing country” by 2035.
That would mean China needs to grow at an average growth rate of around 4.7% a year between 2021 and 2035, according to Larry Hu, chief China economist at the Macquarie Group.
Hu added that the target could be difficult to meet as the economy faces various structural headwinds, such as falling property, an aging population and rising tensions between the United States and China.