China’s economy grew 4.5% in the third quarter. That’s Beijing’s number. Capital Economics counted electricity use, passenger traffic and hundreds of other quiet series and got 2%. Rhodium Group looked at retail sales and investment and got about zero for the year. Katrina Northrop of the Journal puts the old question on page one. No one outside Beijing can fully check the numbers.
Here’s why the doubt is growing. Property is still sliding. Companies are cutting prices to survive. Households won’t spend. Spending on buildings, factories and roads, what the statisticians call fixed-asset investment, dropped more than 7% in the first three quarters from a year earlier. Retail sales fell in May for the first time in three years, then picked up over the summer. Exports carry the growth. We covered that split on Oct. 20, when the 4.5% figure first came out. Western estimates for the full year now run from 0% to 3%. The IMF, for its part, still projects 4.5%, in line with Beijing’s target of 4.5% to 5%.
The bigger problem is what you can’t see. China doesn’t publish a detailed breakdown of quarterly GDP. It doesn’t publish a monthly labor-force participation rate. Youth unemployment reached a record 21.3% in 2023. Beijing’s answer was to stop publishing it, and months later to bring out a new, lower version. Gao Shanwen, a well-known Chinese economist, voiced doubts about the GDP figure at a Washington forum in 2024. He was investigated and disciplined for it. Back in 2007, Li Keqiang, later the premier, called his own province’s GDP “man-made.” He watched electricity, rail freight and bank loans instead. Economists still lean on measures like it.
The jobs number that never moves
The official jobless rate ticked down to 5.2% in September. Zhu Tian of the China Europe International Business School calls it “just too stable.” Roughly a third of China’s people live in the countryside, and the headline rate doesn’t count them at all. A Tsinghua economist put the broad urban rate at 10.2% in July, counting people who hadn’t found work in two years. Gig workers count as employed even when the pay and hours are thin. Julian Evans-Pritchard of Capital Economics says the gap between his estimate and the official one widens whenever Beijing is struggling to hit its target. His fix is simple. Drop the annual growth goal, so nobody has a reason to inflate the number.
Our read
This is Investments/Risk, IN04. When a country’s numbers can’t be checked, we size the position for the worst case and stop arguing about the number. Our emerging-markets exposure is VWO, held at weight in 9 books; nothing added. China is a big slice of that fund, and that slice is what you own, whatever Beijing reports. Korea and Taiwan sit in their own funds, EWY in 17 books and EWT in 7, so we can see each bet on its own.
The one thing to check is the China weight in your international fund. This week, pull the fact sheet, find the country breakdown, and multiply China’s share by the fund’s share of your account. That’s your China bet. If it’s bigger than you’d guess, that’s worth knowing before the next data release, whatever it says. A good roof gets checked on a dry day, and a position gets sized before the number you can’t verify. We’re happy to run the math with you.