China’s Unexpected GDP Delay Blamed by Analysts on Party Meeting
- Official economic data due this week delayed, no reason given
- Government officials gathering for party congress this week
China delayed the publication of gross domestic product data a day before the report was scheduled for release, a move likely to add to investor uncertainty and that was attributed by analysts to the Communist Party’s congress this week.
The National Bureau of Statistics updated its release schedule on Monday, with the dates for major economic indicators due the next day marked as “delayed.” It didn’t give a reason for the change, and provided no information about a new publication date.
China’s economy likely rebounded from a near-stagnant second quarter
Third-quarter GDP data and other monthly economic indicators were scheduled to be released by the bureau on Tuesday, in the middle of the ruling party’s congress — a twice-a-decade event that’s expected to hand President Xi Jinping a third term as party chief.
Pulling the data release unexpectedly “isn’t a good look” as China’s quarterly statistics are closely watched by investors around the world, said Jeremy Stevens, chief China economist at Standard Bank Group Ltd.
“But it doesn’t surprise me given the importance of the event that’s going on,” he said. “People are working 24 hours a day on announcements coming out of the congress and that is where attention and capacity is focused.”
The congress has consumed the attention of China’s entire government, with thousands of top officials gathered in Beijing for the event, and government staff at all levels required to halt their normal work to study Xi’s work report delivered on Sunday in detail.
A social media post by China’s statistics bureau on Monday showed staff from across the country intently watching Xi’s speech “through various online and offline methods such as radio, television, Internet, and mobile phones.”
Indicators that were delayed include quarterly GDP as well as the monthly industrial output, energy production, fixed-asset investment, property investment and sales, retail sales and home prices. Official trade figures also weren’t released last week.
The statistics bureau’s data release schedule for this year was drawn up well before the date for the party congress was finalized. Even so, the lack of explanation for the delays could further worry markets.
“This could cause some uncertainties and cautiousness among investors in the absence of explanation for such an unusual delay,” said Ken Cheung, chief Asia FX strategist at Mizuho Bank Ltd.
Economists surveyed by Bloomberg expected GDP to show a rebound in the third quarter to 3.3% after near-zero growth in the April-June period. That would still be a low growth rate for China, reflecting the impact on the economy from tight coronavirus controls and the country’s longest property slump in recent history.
While delaying the report at such short notice was concerning, it’s unlikely to reflect worries about weakness in the data, said Iris Pang, chief economist for Greater China at ING Groep NV.
“I think it’s just that there’s been a lot of information and chaos for the market over the party congress already, and the government doesn’t want to further induce market volatility,” she said.
Earlier Monday, an official from the nation’s economic planning department said third-quarter growth had “rebounded significantly.” Economic indicators for the industrial and services sectors as well as data for investment and consumption continued to improve, Zhao Chenxin, a deputy director of the National Development and Reform Commission, told reporters.
“My guess is they want to avoid potential distractions from the congress,” said Duncan Wrigley, chief China economist at Pantheon Macroeconomics. “I would say now is a more politically sensitive time, given the economy and the expected reappointment of Xi for a third term.”
China’s General Administration of Customs also didn’t publish monthly trade data that were scheduled for release on Oct. 14. The agency didn’t provide a reason.
Postponing economic data releases is extremely rare in China. During the previous party congress in 2017, the NBS published the GDP figures at a briefing as scheduled.
“The delay could spur some concerns that the data could underperform but for now, I think markets are accustomed to the weak growth story,” said Jun Rong Yeap, market strategist at IG Asia Pte.