Growth Rate Announcement Suddenly Postponed... "Xi Jinping's Third Term, China's Economy Faces Greater Challenges"

Pouring Cold Water on the 'Coronation' to Decide Si's Third Term
Possibility of Delaying Indicator Disclosure Due to Disappointing Performance
System Prioritizing Power and Ideology Over Productivity Negatively Affects Output

[Image source=Yonhap News]

[Asia Economy Beijing=Special Correspondent Kim Hyun-jung] As China suddenly postponed the announcement dates of key economic indicators such as the third-quarter gross domestic product (GDP) growth rate, forecasts are emerging that the Chinese economy under the 'Xi Jinping 3rd term' regime will face even greater difficulties. It is highly likely that the postponement was to avoid revealing below-expectation figures in order not to spoil the grand atmosphere of the 20th National Congress of the Communist Party (Party Congress), which will decide Xi Jinping's third term. This suggests that as the regime deepens its prioritization of power and ideology, the economy struggles to demonstrate productivity. If China falls into a vicious cycle of low growth, South Korea, which regards China as its largest trading partner, will inevitably suffer adverse effects.

On the 17th around 5 p.m., the National Bureau of Statistics of China revised the announcement schedule on its website, changing the release of various economic indicators originally planned for the next day?including the third-quarter economic growth rate, September industrial production, and September retail sales?to 'postponed.' No reasons for the postponement or revised schedule were provided. Earlier, the General Administration of Customs of China did not announce the September and third-quarter import-export statistics, which had been scheduled for the 14th, by the end of business hours without any notice.

Experts widely agree that the background for the sudden postponement of major economic indicators is the 20th Party Congress. Local media, focusing on praising Chairman Xi’s achievements over the past decade and building legitimacy for his third term, are believed to have decided to preemptively block the release of poor economic results that could serve as a 'blemish.'

China’s GDP growth rate in the second quarter was only 0.4%, the lowest since the first quarter of 2020 (-6.8%) when the COVID-19 pandemic began. On the same day (the 17th), Zhao Qingshen, Deputy Director of the National Development and Reform Commission of China, emphasized that "the Chinese economy has greatly recovered in the third quarter," which heightened interest in the actual figures. If the numbers could support this 'confidence,' there would be no reason to postpone the announcement at the risk of damaging external investment trust. During the 19th Party Congress in 2017, the third-quarter GDP was announced within the same year.

Amid already high distrust of economic indicators following the zero-COVID policy, the arbitrary delay in releasing data is seen by some as indicative of the 'Xi Jinping 3rd term's' coercive economic management. The policy direction revealed by Chairman Xi in his work report on the 16th, the opening day of the 20th Party Congress, emphasizing strengthened control centered on the Communist Party and an obsession with national security and ideology, lends weight to this perspective.

[Image source=AP Yonhap News]

Following the postponement of the announcement schedule, Western media have criticized the pathological prioritization of power in China. The Wall Street Journal (WSJ) on the 17th (local time) cited a recent study by the Geoeconomics Center under the Atlantic Council, reporting that unless the Chinese government addresses productivity decline and population decrease, average growth will remain in the 3% range until the mid-2020s. Helge Berger, IMF’s China representative, told the WSJ, "China’s enthusiasm for market-based economic reforms is gradually fading," adding, "China’s growth potential may be much lower than we thought." The journal further reported, "According to IMF analysis, productivity growth averaged only 0.6% over the past decade under Chairman Xi, a sharp decline from the previous five-year average of 3.5%. The dynamic private sector has been sacrificed for Xi’s political agenda and strengthening state control."

Bloomberg News reported, "The entire Chinese government is focused on the Party Congress, with thousands of senior officials gathered in Beijing for the event," adding, "All government employees have suspended normal duties to study Chairman Xi’s work report delivered on the 16th." It continued, "With global investors paying close attention to China’s quarterly statistics, an unannounced postponement is not a good look," quoting Jeremy Stevens, Chief China Economist at Standard Chartered Bank, who said, "It seems that all attention and resources within China are concentrated on the Party Congress."

If China deviates from the growth trajectory it initially expected, South Korea will also be adversely affected. Chairman Xi’s policy of controlling private companies and funneling financial and institutional privileges to state-owned enterprises is already causing negative repercussions in the domestic industrial sector. After recording deficits from May to August this year and turning a surplus last month, South Korea’s trade balance with China has returned to a deficit of $459 million (approximately 655.452 billion KRW) from the 1st to the 10th of this month. According to the Korea Chamber of Commerce and Industry, a 10% decrease in exports to China would reduce South Korea’s economic growth rate by 0.56 percentage points (p), and a 20% decrease would lower it by 1.13 p.

This content was produced with the assistance of AI translation services.