(Bloomberg) — China’s economy likely grows slower than official figures suggest, and a rate of expansion of around 3% to 4% is probably a realistic outlook for the coming years, according to a prominent Chinese economist.
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The remarks on Thursday by Gao Shanwen, chief economist at SDIC Securities, who’s previously advised the country’s regulators and top officials, came as policymakers in Beijing signal more public borrowing and spending in 2025, with a shift of policy focus toward consumption.
Gao saw a wave of publicity earlier this month with an assessment that China’s youth are draining vigor from consumption as a result of deep job losses — comments that went viral. Thursday, he said that it’s likely official Chinese data overstate the pace of economic expansion.
“We do not know the true number of China’s real growth figure and maybe some other numbers,” Gao said at an event hosted by the Peterson Institute for International Economics in Washington. He noted that many people speculate that “after the pandemic, those numbers may not be so accurate.”
For years, China’s GDP figures were widely viewed as unreliable, something the National Bureau of Statistics itself acknowledged in 2019, when it said the situation had improved. A former premier even famously created his own gauge of growth. Gao’s comments suggest there may be continuing issues.
Official data show the world’s second-biggest economy grew 5.2% last year, and it’s tipped by private economists to meet Beijing’s growth target of around 5% this year even as a real estate slump and sluggish consumption continue to weigh on demand.
“My own speculation is that in the past two-to-three years the real number on average might be around 2% even though the official number is close to 5%,” Gao said. “If my speculation is correct, I think it might be more reasonable to expect a growth rate between 3%-4% in the years to come, the next three to five years, but we know the official number will always be around 5%.”
In an effort to boost growth, officials led by President Xi Jinping have signaled they’ll raise the fiscal deficit target next year. For only the second time in at least a decade, they made “lifting consumption vigorously” and stimulating overall domestic demand their top priority, according to an announcement made following a two-day huddle of the Central Economic Work Conference in Beijing.
