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China Conceals Increasing Amounts Of Data Amid Growing Concerns

| Updated: August 17, 2023 4:40 pm

China’s decision to halt the release of data concerning its surging youth unemployment rate has raised further concerns about the country’s increased control over sensitive information. This move, particularly when the data portrays the nation’s economy in a negative light, highlights a trend of heightened restrictions on information dissemination.

The unemployment rate among those aged 16-24 has become a focal point of this data suppression. In June, this figure reached a record-breaking 21.3%, a statistic that holds significant implications for the ruling Communist Party’s emphasis on maintaining social stability. This rate of one-fifth of the youth population being unemployed underscores the challenges facing the government.

China’s economic landscape is currently grappling with various threats to achieving its 2023 economic expansion targets. Consequently, a broader range of data is now being classified as unsuitable for public consumption. Additionally, the ideological rivalry between President Xi Jinping’s administration and the US has prompted China to safeguard data that could potentially benefit the Biden administration.

Though much of China’s concealed data disappears without fanfare, the decision to withhold the unemployment rate was officially announced during a press briefing. While the National Bureau of Statistics has a history of withholding unfavourable economic releases, such decisions are typically not disclosed to the public.

In the past month, the government had hinted at the likelihood of an increase in the July unemployment figure, possibly setting another record. However, on a sudden turn of events on Tuesday, officials declared a temporary halt to the publication of this data, citing the need to refine the assessment methodology. The complexity of accurately calculating the employment rate, coupled with changing economic dynamics and labour patterns, could have influenced this decision. Nevertheless, the timing of this suspension raises questions, especially given the projected record-high number. The authorities have indicated a potential resumption of data publication in the upcoming months.

In a similar vein, specific data sets, such as land purchase numbers and corresponding prices by developers, have been conspicuously absent from monthly releases. Despite tracing back to 1998, this data series vanished from reports, coinciding with a more than 50% drop in land sales for development in the previous year. This substantial decline indicates a housing crisis more severe than officially acknowledged, with official figures indicating only a 23% reduction in local government revenue from land sales.

Another enigmatic data point involves the government’s holdings of official foreign exchange assets, which have remained remarkably stable since 2017. This stability contrasts with China’s increasing trade surplus over the same period, a scenario that should have resulted in higher reserves. Notably, former US trade and Treasury official Brad Setser has suggested that a significant portion of these reserves is hidden. Much of these reserves remain off the balance sheets of the People’s Bank of China, residing as “shadow reserves” within entities like state commercial lenders and policy banks. This situation suggests potential intervention in currency markets.

The concealment extends beyond economic indicators to encompass private sector data. In March, the bond market faced turmoil as fixed-income brokers ceased supplying aggregated bond quotes to data vendors relied upon by traders. This move led to a sudden decline of 30% to 60% in transactions, allegedly driven by regulators’ concerns over data security. Likewise, the main bond trading platform for foreign investors halted data provision on transactions in May 2022, following significant outflows from China’s $20 trillion debt market.

Furthermore, overseas access to segments of the prominent academic database, China National Knowledge Infrastructure, was suspended after April 1. This cessation has impeded foreign academics from accessing Chinese dissertations, patents, statistics, and conference proceedings. The shift aligns with a 2022 law on cross-border data transfer and has impacted access to statistical yearbooks and Chinese census data.

Notably, information gaps extend beyond economic realms. Biographies of senior politicians and officials have been abbreviated, providing only basic personal information rather than the comprehensive resumes previously available. Moreover, at least three months passed without the Communist Party releasing summaries from its top decision-making body since Xi’s third term commenced in October. Typically, the Politburo’s monthly meetings are accompanied by statements outlining discussed topics; however, this did not occur in November, January, or May.

Adding to this vacuum of information, China’s foreign minister was abruptly removed from his role in July after disappearing from public view for a month. This event further underscores the opacity within China’s elite political circles.

The latest move by the Chinese government to tighten information control has not gone unnoticed by social media users, who are increasingly sceptical. A popular posthumously suggests that the authorities have resorted to their final option after exhausting all others, akin to using a blindfold after realising that the only remaining tool is a megaphone.

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