Beijing: Official data on growth and veiled criticisms
The authorities continue to claim that the target of GDP growth of ‘around 5%’ driven by electric car exports will be met in the year to come. But discontent remains widespread and even the anti-corruption crackdown in the Party is fuelling paralysis especially among senior cadres. While worrying analyses by two well-known Chinese economists have been taken off social media.
The year 2024 is almost over and it is time for the Chinese government to take stock of its economic situation. As reported in a recent article in the People's Daily (Renmin Ribao), the Party's main press organ, the central authorities say they are ‘quite confident’ that the targets set for this year's GDP growth of ‘around 5 per cent’ and a contribution to global growth of 30 per cent will be achieved.
The results achieved so far, albeit ‘painfully’, would show that China's economy is ‘stable’ and that ‘its growth trend will not change in the long term’, which is why Xi Jinping himself calls for ‘strengthening confidence in China's economic development’.
Official figures claim that driving the slow recovery of the Chinese economy after the crisis following the Covid-19 pandemic is the electric car sector, whose production in the first 10 months of 2024 increased by 33% year-on-year.
Growth was also reported in the manufacturing sector, which is reported to have recorded a +32.2% year-on-year increase of 11.2% in the same period. While the total import-export value would have even reached a record level, with +5.2%.
The encouraging numbers and optimistic propaganda tones, however, are not enough to quell the widespread discontent among ordinary people and in fact there are still many challenges facing the Chinese economy.
The online magazine ‘The Diplomat’, for example, examines the issue from a different perspective to those normally taken into account by experts, showing how recent changes to the system of evaluating the performance of local cadres have affected local economic growth, having made the latter an irrelevant factor in obtaining cash prizes or career promotions.
Unlike in the past, in fact, the work performance of government officials at the grassroots level, although counted among the five qualifying criteria for their performance along with morality, competence, alacrity, incorruptibility (de neng qin ji lian) is no longer evaluated at the individual level, but collectively.
This means that in the event of failure to meet economic targets, the responsibility lies with the entire work group and no longer with individual employees. The latter will at most receive a reprimand from the office manager, but will no longer be subject to punishments such as salary reductions or demerit notes as in the past.
In addition, in order to regularise the salary system of middle managers and reduce the ‘grey areas’ in their salaries, local governments have abolished economic incentives linked to job performance, making middle managers even more passive and demotivated in performing their duties.
The problem especially affects senior executives, who, having lost any chance of career advancement, do the bare minimum and tend to ‘make do’ until retirement time arrives. Nor do superiors have any authority over them: being often younger, they are reluctant to give them orders or admonish them, preferring rather to ignore them, as dismissal is not a viable option.
As one Shanghai cadre testifies: ‘I am now 40 years old and this is my last chance to get a promotion. If I don't succeed within the next five years, I will give up. Why should I bother anymore? If my superior tells me to do something, I shout back at him.
Another aspect to consider is the increased frequency and ubiquity with which government officials are subjected to inspections by superior bodies. Since the previous appraisal system was much more focused on numerical results, cadres also resorted to illicit means to obtain them, often assuming attitudes comparable to those of mafia subjects.
In order to appease public dissatisfaction with these behaviours, the Chinese government has tightened controls on the actions of officials through more thorough examinations of local accounts, money flows and official documents.
While the increase in inspections has served to significantly reduce illegal activities, it has also contributed to a decrease in cadres' interest in their work, as filling out paperwork to satisfy inspections has become more important than the end goals themselves, including those of an economic nature.
Regardless of what the country's economic problems are, talking about them openly in China seems to have become taboo. This is well known by the Chinese chief economists Gao Shenwen and Fu Peng, respectively employed at the investment companies SDIC Securities and Northeast Securities, whose statements on the current status of the Chinese economy have set off the alarm bells of censorship.
In a speech in Shenzhen in early December, Gao expressed concern about the inequalities that characterise China's post-pandemic society, which is divided between ‘apathetic’ young people forced to reduce consumption in response to low wages and a weak labour market, ‘desperate’ middle-aged people at the mercy of redundancies and economic uncertainty, and ‘lively’ elderly people who instead enjoy greater stability and a more secure financial cushion.
‘The younger the population of a province, the slower its consumption growth has been,’ the renowned economist said in essence, citing his analysis of regional data.
Gao also suggests that China's unemployment rate for the past three years may have been underestimated, considering that as many as 47 million people failed to find stable employment during the same period, while GDP may have been overestimated by at least 10 percentage points.
For Fu Peng, it is the thinning of China's middle class that is the biggest challenge facing the country: ‘Whenever the economy contracts, it is those at the bottom of the [social] ladder who suffer the most to begin with,’ he said at a closed-door event held in Shanghai in late November, adding that ‘however, this barely has an impact on the macroeconomic data’.
Gao and Fu's remarks soon went viral on Chinese social media, where the two experts were praised for the ‘unusual frankness’ with which they describe China's current situation.ù
A user of China's leading microblogging platform, Weibo, wrote that the impact of their words on the public is like that of ‘a stone that has lifted a thousand waves’, precisely because they ‘spoke the truth and hit the nail on the head’. He therefore added: ‘It is time to wake up and stop being intoxicated by dreams of prosperous times’.
Prompted by the campaign launched in October by the Cyberspace Administration of China, the country's cyberspace regulator, to increase controls on online content creators, within a short period of time the WeChat accounts of both economists were blocked, and recordings and notes relating to their speeches were removed from the web.
This shows how censorship is intensifying towards opinions that tend to question the Chinese government's official narrative on the status of the economy and the ‘bright prospects’ it promises.
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