What's Going On in China?
By Evan Anderson
Why Read: This week's issue covers the population, COVID situation, and Communist Party leadership of China and their implications for businesses, geopolitics, and trade.
"Aside from the fact that one does not typically hide evidence of good performance, many of the more granular discontinued data series were previously used by analysts to check against China's headline indicators, frequently finding the GDP figures overstating performance. We are left with increasingly unconventional indicators to gauge China's current performance. It doesn't look good." - "CHINA'S GDP BLACKOUT ISN'T FOOLING ANYONE," THE Financial Times, 10/20/22
Throughout the last few decades, treatment of data from the government of the People's Republic of China (PRC) has become something of a phenomenon in multiple fields. The story repeats itself across health, population, and growth statistics. First, the government releases official figures that always seem to meet exactly the standard they were hoping for. Very convenient.
What happens next is more interesting. With little else to go on, global major media, governance bodies, and public officials proceed to regurgitate these smoothed statistics and, worst of all, include them in datasets, projections, and other key measurements relevant to global economics and trade. This acceptance of what are clearly false statistics has many reasons (political and corporate capture, fear of angering Chinese Communist Party officials, and more) that we have often covered in SNS reports. Moving past the "why," however, we are always left with the same crucial question: "What's really going on in China?"
As we enter 2023, this question is perhaps more important than ever before. With simultaneous explosions of novel-coronavirus cases, a public announcement about declining population, and new, delayed GDP numbers out this week, one of the world's largest countries and economies is in severe turmoil.
Let's dive into what can be discerned about the real situation in China and what it means for the rest of us.