China unexplainedly delays release of GDP and other key economic data amid Communist Party Congress

From Mao to Xi Jinping: The story of China’s presidents 4:01 (CNN Business) — China abruptly delayed the release of key economic data, a day before it was scheduled to be released, as the ruling Communist Party meets in a major 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 the much-followed GDP growth, marked as “lagging.” The indicators, due for release on Tuesday, also include quarterly retail sales, industrial production and monthly unemployment rates. The statistics office did not give a reason for the delay or set a new release 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 Communist Party 20th National Congress in Beijing, where Chinese leader Xi Jinping 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. This is the legacy of communist leader Xi Jinping in China 3:03 Other analysts think it could be because the data sets are not pretty. “My forecast is for a new fall of 1.2% [sobre una base trimestral del PIB de China]. 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 decreased 2.6% in the second quarter from the previous one, reversing a 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 put pressure on the economy. Challenges for the Chinese economy Economists polled by Reuters had expected China’s GDP to grow 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 occurs, 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 ongoing covid lockdowns have not only wreaked havoc on the economy, but have also led to growing social unrest. China worries about youth unemployment 1:00 In the report of the 20th Party Congress published on Sunday, Xi renewed his commitment to make China a “middle developed country” by 2035. That would mean that China needs to grow at a rate of average growth of about 4.7% a year from 2021 to 2035, according to Larry Hu, chief China economist at 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 US and China.