The Chinese government has taken its authoritarian behavior to the next level by eliminating and suppressing important economic data. The Chinese economy has been experiencing a decline even before the pandemic, with measures like youth unemployment reaching record highs. Rather than addressing the issue, the government has chosen to pretend it doesn’t exist by suspending the publication of the numbers. This move raises concerns about the reliability of Chinese statistics, which have always been suspected of manipulation.
The decision to eliminate the data altogether is a clear red flag. Investors and the public can reasonably assume that the situation is worse than previously believed. This aligns with the Austan Goolsbee rule of data that states, “Nobody hides good news.” It’s highly unlikely that the Chinese government is hiding positive economic indicators.
Not only has China nuked its own data, but it has also tried to suppress independently produced statistics and analyses. Foreign banks operating in China were instructed last year to avoid publishing economic reports on politically sensitive topics. This kind of behavior is not limited to China and occurs in other countries as well.
Hiding data not only raises concerns about the current economic conditions but also highlights flaws in the country’s governance and credibility. This may lead to a loss of confidence among the Chinese public and foreign investors. Instead of preserving confidence, the government’s actions may have the opposite effect and further contribute to a decline in the economy.
China’s leaders should take note and reconsider their data-destroying authoritarian instincts. Transparency and credibility are crucial for a country’s governance and economic stability.
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