China has abruptly delayed the publication of key economic data, one day before its scheduled release, as the ruling Communist Party gathers at a major political meeting against the backdrop of a faltering economy.
The country’s National Bureau of Statistics updated its schedule on Monday, with the dates for a series of economic indicators – including the closely-watched GDP growth – marked as “delayed.” The indicators, which had been scheduled for release on Tuesday, also include quarterly retail sales, industrial production and monthly unemployment rates.
The bureau 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 were initially scheduled to come out on Friday.
The delay of the highly anticipated data coincides with the week-long 20th Communist Party National Congress in Beijing, where Chinese leader Xi Jinping is expected to secure a norm-breaking third term in power. Priorities presented at the gathering will also set China’s trajectory for at least the next five years.
“The delay suggests that the government believes that the 20th Party Congress is the most important thing happening in China right now and would like to avoid other information flows 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 are not pretty.
“My forecast is for a further decline of 1.2% [in China’s GDP.] This would mean China had joined the US in a technical recession,” said Clifford Bennett, Chief Economist at ACY Securities.
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The delay would make sense “from an image management perspective,” he said.
China’s GDP declined 2.6% in the second quarter from the previous one, reversing a 1.4% growth in the January-to-March period. On a year-on-year basis, the economy expanded 0.4% in the second quarter.
Analysts have widely expected third-quarter growth to remain weak, as strict Covid curbs, an intensifying crisis in real estate, and slowing global demand continue to pressure the economy.
Economists polled by Reuters have expected China’s GDP to expand by 3.4% in the third quarter from a year earlier. That would fall far short of the government’s full-year growth target of around 5.5%.
Bennett expected the third-quarter GDP data to be released after the party congress.
“Whenever the release occurs, we should all be prepared for some global financial market reaction if the world’s two largest economies are both in recession this year, ” he said.
China’s economy is ‘in deep trouble’ as Xi heads for next decade in power
China’s economy is facing mounting challenges. Growth has stalled, youth unemployment is at a record high, and the housing market is in shambles. Constant Covid lockdowns have not only wreaked havoc on the economy, but also sparked rising social discontent.
China is the world’s last major economy still enforcing strict zero-Covid measures, which aim to stamp out chains of transmission through border restrictions, mass testing, extensive quarantines, and uncompromising snap lockdowns.
Last week, two large banners were hung on an overpass of a major thoroughfare in Beijing, protesting against Xi’s zero-Covid policy and authoritarian rule. It was a rare protest against the top leadership in the country, signaling the frustration and anger among the public.
Many international organizations, including the IMF and World Bank, have recently downgraded China’s GDP growth forecasts for this year, citing zero-Covid as one of the major drags.