Advertisement
The View | China’s Li Keqiang presents an economy in distress in NPC speech. Is it just growing pains?
- The lack of an accurate GDP growth figure means the true state of the Chinese economy, now facing its slowest growth in almost 30 years, remains guesswork, heightening worries over debt and unemployment
Reading Time:3 minutes
Why you can trust SCMP
Spare a thought for poor Li Keqiang, premier of the People’s Republic of China, having to present the state of the Chinese economy to the people at the National People’s Congress earlier this week. China’s economy is growing at its slowest rate in almost 30 years. As the boss (well, nearly), reporting on a control and command economy is easy when things are going well – and painful when it’s in reverse.
Advertisement
We ought to remember that Li is a highly competent economist, with a PhD in economics and whose work was awarded China's highest national prize in economics in 1996. Yet reporting that the authorities were now targeting 6-6.5 per cent gross domestic product growth was a tough gig.
The GDP growth figure is both iconic and controversial. The government has its proverbials in a twist by presenting misleading official numbers with a straight face for several years now that are at odds with what is really happening on the ground.
In some ways, that was understandable when the prevailing (if incorrect) logic was that GDP growth was related to social order. As growth has fallen and order has endured, it seems that it has less to do with GDP growth than how the Communist Party manages inevitable, periodic downturns.
The official growth number is unfortunately taken as gospel by official channels; the World Bank, the IMF, and major banks included. They should be ashamed of themselves for parroting a figure for fear of offending someone. Despite widespread disbelief, the official GDP growth number remains at the heart of all Chinese economic calculations.
Advertisement
Advertisement