Xi Jinping goes after economist who questioned China's official GDP numbers: Report

Chinese President Xi Jinping has reportedly ordered an investigation into a prominent economist who questioned the credibility of Beijing’s official GDP figures and criticised the government’s economic policies.

Gao Shanwen, chief economist at state-owned SDIC Securities, has been banned from public speaking for an indefinite period, Washington Post reported citing individuals familiar with the matter.

Why was Gao shunned?

The move came after Gao’s remarks at a Washington forum last month, where he suggested that China’s real economic growth in recent years may have been closer to 2 per cent annually, well below the 5 per cent claimed by authorities. Gao also expressed scepticism about the government’s ability to effectively implement measures to stimulate growth.

“We do not know the true number of China’s real growth figure,” Gao had said during the December 12 event co-hosted by the Peterson Institute for International Economics and a Chinese think tank. He speculated that the actual growth rate might be significantly lower than official data suggested.

Xi is said to have been angered by Gao’s remarks, ordering that he be disciplined. Although Gao has retained his job, his public engagements have been curtailed. A planned lecture at China’s Nankai University was abruptly cancelled in January, reportedly due to “scheduling conflicts.”

China’s GDP: Mysterious or misleading?

This crackdown on Gao comes as Beijing seeks to manage growing concerns over its economic trajectory. China’s economy faces mounting challenges, including a real estate crisis that has eroded household wealth by an estimated $18 trillion, rising debt nearing 300 per cent of GDP, and industrial overcapacity. Analysts have raised concerns about the risk of a deflationary spiral.

The Securities Association of China recently issued directives urging economists to “play a positive role” in interpreting government policies, warning of consequences for those deemed to have made “irresponsible remarks.” The China Securities Regulatory Commission echoed this sentiment but denied broader claims about Gao’s situation, Washington Post reported.

Beijing has intensified efforts to suppress negative commentary about the economy, with senior officials urging tighter control over economic messaging. In a recent meeting, Cai Qi, Xi’s chief of staff, called for greater “expectation management” to counteract pessimism.

Doubts about the reliability of China’s economic data have persisted for years. Former Premier Li Keqiang famously relied on alternative indicators such as electricity usage and freight volumes instead of GDP figures to gauge economic health.

Growing scepticism about China’s growth

More recently, discrepancies between official data and other economic indicators, such as wage growth and exports, have fuelled scepticism among economists.

China’s official statistics claim the economy grew 5.2 per cent in 2023 and is on track to meet similar targets this year. However, Gao’s comments suggest a more modest outlook, with growth potentially averaging 3 per cent to 4 per cent in the coming years.

Such a slowdown would challenge Xi’s goal of doubling the nation’s economic output by 2035.