The News
China said its economic growth met official targets, but some analysts were skeptical and others warned of challenges ahead.
The country reported better-than-expected GDP growth in the fourth quarter, helping it reach Beijing’s goal of full-year expansion of 5%, thanks in part to economic stimulus and importers elsewhere ramping up purchases of Chinese goods ahead of expected tariffs from the US.
Yet the chief China economist at the Australian bank Macquarie said the country would still be grappling with the risk of deflation, growing numbers of ordinary Chinese — facing high unemployment and stagnant salaries — are complaining of worsening living standards, and any targets for the year ahead will face “headwinds from tariffs and sanctions,” ING’s Greater China chief economist noted.
SIGNALS
Beijing censors economic critics as Trump tariffs loom
Chinese leader Xi Jinping himself moved to ban a prominent economist from speaking publicly for a period of time, after he cast doubt on Beijing’s official 5% growth estimate at a forum, The Wall Street Journal reported. It comes as the government increasingly censors domestic criticism of its economy: Beijing wants to “project strength and prepare to confront” US President-elect Donald Trump’s protectionist tariffs, The Journal wrote. But the efforts don’t appear to be boosting investors’ confidence: China’s CSI 300 equity index dropped 2.9% on Jan 2., the steepest decline on first trading day of the year in almost a decade. Chinese citizens too remain unconvinced by the government’s figures and believe Beijing is “blind to reality,” the Financial Times wrote.
GDP obsession is leading balanced growth to stall
Experts have long suggested that China’s national GDP is difficult to accurately calculate because many local government officials often inflate GDP figures to appease Beijing, according to financial magazine Caijing. This is done through “local protectionism and administrative monopoly,” Caijing wrote, which boosts regional industries — and raises local GDP — but “hinders the free flow of [other] goods and production factors,” leading cities to spiral into debt and delaying bolder stimulus measures. A Yale study found that local officials often manipulate GDP reports in order to get promoted. The study noted that Beijing has uncovered manipulation cases in the past, and would want accurate local reports in order to make better economic decisions, Caijing said, but the government hasn’t updated its regional economic evaluation system that would encourage change.
Chinese cities eye megastars to boost consumer spending
Shanghai officials are talking with Taylor Swift’s team about a possible performance in the city in 2025, local reports suggested, as major Chinese cities seek to stage concerts by international talent to boost tourism and consumer spending. But hosting foreign artists in China “involves a maze of regulations and restrictions,” the South China Morning Post reported, because of Beijing’s concerns about their cultural influence and security controls. Still, there are signs the hurdles are easing: American rapper Kanye West sold out two shows in Hainan province in 2024, and Ed Sheeran is scheduled to play six shows in Hangzhou this year.