China’s first-quarter 5.3% growth handily beat expectations and Beijing’s own target of “around 5%.” But if you ask households, companies and even the taxman, the reality on the ground feels a lot less rosy.
By the end of 2023, only 9.5% saw good job prospects, according to the central bank’s latest urban depositor survey. Preparing for rainy days, households added 8.6 trillion yuan ($1.2 trillion) in their savings in the first quarter, prompting some banks to discontinue long-term fixed-income offerings to protect their margins.
Accusations that China is cooking its economic-expansion statistics have been around for decades.
The main factor has to do with how China calculates quarterly GDP. It uses a so-called production account, which prioritizes the value-add of each industry and brushes away end demand.
As China undergoes structural transitions, it’s becoming harder to read the economy and figure out when and where it bottoms. That the government is quick to stop providing insightful statistics doesn’t help either.
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