- China’s post-COVID economic recovery has fizzled out this year.
- Beijing is telling economists not to talk about deflation or falling foreign investment, per the FT.
- Policymakers are mulling how to revive growth but yet to announce a “big bang” stimulus package.
China’s government is warning economics experts not to talk about the economy in a negative light, the Financial Times reported Sunday.
Economists, brokerage analysts, and researchers all told the publication that regulators, their employers, or local media had warned them not to talk about deflation, slumping foreign investment, and faltering growth, the newspaper reported.
Authorities “want us to interpret bad news from a positive light,” one central bank advisor told the FT.
“It will be bad if you don’t see me tomorrow,” a different economist told a closed-door conference after acknowledging that “low inflation” was a potential area of concern, per the UK-based outlet.
The crackdown comes after months of data that suggest China will fail to achieve the rapid economic recovery that Beijing dreamed of when it lifted its harsh zero-COVID restrictions at the end of last year.
In July alone, second-quarter growth came in well below economists’ expectations, consumer price inflation fell to 0{1652eb1ffa4184925f6a63a9c04ea6b421acb7a78117241e7d4325cdca8339fa}, and youth unemployment skyrocketed to 21{1652eb1ffa4184925f6a63a9c04ea6b421acb7a78117241e7d4325cdca8339fa}.
Meanwhile, international investors have pulled money out of the country in response to President Xi Jinping’s hardline authoritarian rule, with foreign direct investment plunging by $100 billion to just $20 billion over the first three months of 2023, per the Rhodium Group.
Beijing has publicly acknowledged that the economy is facing “new difficulties and challenges” – and pledged to roll out a stimulus package “with precision and force” – but is yet to bring in the “big bang” measures that many analysts believe will be necessary to spark a revival.