China abruptly delayed the release of key economic data, a day ahead of its scheduled release, as the ruling Communist Party meets in a big political meeting on the bottom of a failing economy.
The country’s National Bureau of Statistics updated its calendar on Monday, with the dates for a range of economic indicators – including closely watched GDP growth – marked as “lagged”. The indicators, slated 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 release date.
Separately, the country’s customs authorities have also postponed the release of monthly trade data, which was originally due to be released on Friday.
The highly anticipated data delay coincides with the week of the 20th National Communist Party Congress in beijingwhere the Chinese leader Xi Jinping should get a third term in office that breaks the norm. The priorities presented at the meeting will also determine 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 wants to avoid further 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 think it could be because the datasets aren’t pretty.
“My forecast is for a further decline of 1.2% [in China’s GDP.] That would mean China had joined the United States in a technical recession,” said Clifford Bennett, chief economist at ACY Securities.
The delay would make sense “from an image management perspective,” he said.
China’s GDP fell 2.6% in the second quarter from the previous quarter, reversing a 1.4% growth in the January-March period. On an annual basis, the economy grew 0.4% in the second quarter.
Analysts generally expect third-quarter growth to remain weak as tight Covid restrictions, an escalating housing crisis and slowing global demand continue to pressure the economy.
Economists polled by Reuters expect China’s GDP to rise 3.4% in the third quarter from a year earlier. This would be well below the government’s annual growth target of around 5.5%.
Bennett expected third-quarter GDP data to be released after the party convention.
“Whenever the release occurs, we should all be prepared for a reaction from global financial markets if the world’s two largest economies are both in recession this year,” he said.
The Chinese economy is facing increasing challenges. Growth has stalled, youth unemployment is at an all-time high and the housing market is in shambles. The constant Covid lockdowns have not only wreaked havoc on the economy but also triggered growing social discontent.
China is the last major economy in the world to implement strict zero Covid measures, which aim to eradicate chains of transmission through border restrictions, mass testing, extended quarantines and instantaneous lockdowns without compromise.
Last week, two large banners were hung on an overpass of a major thoroughfare in Beijing, protesting against Xi’s zero-Covid policy and his authoritarian rule. It was a rare protest against the country’s top leaders, signaling public frustration and anger.
Many international organizations, including the IMF and the World Bank, recently downgraded China’s GDP growth forecast for this year, citing zero-Covid as one of the main drags.