China’s latest strategy for boosting its struggling economy: hide the unflattering data, and pretend everything’s OK.
The National Bureau of Statistics said Tuesday it would stop releasing youth unemployment numbers, after joblessness among 16-to-24 year olds spiked to 21% in June.
It cited the need for “further optimization” of its metrics – but it’s more likely that Beijing decided not to report the latest data in a bid to shut down the idea that the world’s second-largest economy is struggling.
Earlier this year, former Treasury official Brad Setser questioned whether China was accurately disclosing its foreign currency holdings. And last week the Financial Times reported that officials had told prominent economists not to discuss issues such as deflation or stuttering growth.
However, China’s efforts to persuade the world that its economy is in rude health are likely to fall flat.
That’s because the numbers it is still publishing make for grim reading – with second-quarter growth falling well short of forecasters’ expectations, exports plunging to their lowest level in three years, and plunging shop and factory prices leading to deflation.
JPMorgan strategists warned earlier this month that China could stagnate in a similar manner to 1990s Japan if its woes carry on, while even Joe Biden joined the pile-on last week.
China’s economy could be a “ticking time bomb“, the President told a fundraiser event in Utah, adding that “when bad folks have problems, they do bad things.”
On Tuesday, China’s central bank make its largest interest-rate cut since the pandemic, while policymakers are believed to still be mulling whether to roll out a more comprehensive “big bang” stimulus package.
Those measures could help jumpstart China’s struggling economy – but trying to turn off the bad news tap will not.
