Transparency values of U.S., China on full display as Beijing hides GDP numbers
In contrast to Beijing's secrecy, America puts out statistics — even though they reflected negative growth
The competing values of the United States and China amid our strategic competition are on full display this week with yet another reminder about commitment to transparency (or lack there of).
With no explanation, China announced Monday it would delay indefinitely highly anticipated numbers for quarterly GDP growth between July and September. The numbers, as China faces continued economic stagnation, were expected to show subpar performance.
From Keith Bradshaw at the New York Times:
Large countries seldom postpone the release of even a single economic statistic for fear of hurting financial confidence, much less the broad array of market-moving data that China’s National Bureau of Statistics has now delayed. In addition to deferring the release of gross domestic product data for the third quarter, the government agency also postponed the release of September data for retail sales, industrial production, fixed asset investment and other categories.
“I’ve not come across before a situation where a whole raft of statistical reporting has just been postponed, in nearly half a century of monitoring data releases — not even in times of pestilence and conflict,” said George Magnus, a former chief economist of UBS who is now an associate at the China Center at Oxford University.
China, as the country continues to vie for preeminence in world affairs, is utterly rejecting the numbers its hiding would spell bad news, according to the New York Times:
Zhao Chenxin, the deputy director of the National Development and Reform Commission, had taken an upbeat tone about the Chinese economy during a news conference on Monday morning at the media center of the party congress.
“Judging from the current situation, the economy rebounded significantly in the third quarter — from a global perspective, China’s economic performance is still outstanding,” he said.
Does anyone believe that? As Jerry McQuire famously put it, "Show me the money!"
China is of course hiding bad news. It doesn't take a Ph. D in economics to realize the country would be eager to share positive GDP growth numbers and bury unflattering statistics on the economy. The secretive approach is totally consistent with China's leadership when faced with potentially embarrassing news.
In stark contrast, the United States put out its numbers with due diligence even though the statistics decidedly reflected negative growth in domestic output.
This year, for the first time since 2009, GDP growth in the United States was negative for two quarters in a row. The first quarter of 2022 saw a drop of 1.6 percent, then GDP fell another 0.9 percent in the second quarter, according to the Bureau of Economic Analysis. The advanced estimate on the next official quarterly report on GDP growth is due to come out October 27.
Sure, the White House downplayed the numbers, insisting the United States isn't in a recession despite the definition of some economists. President Biden himself, after the second quarter numbers came out, pointed to job growth, record unemployment and business investment.
The GDP statistics may demonstrate shocking lows and may foreshadow hard times ahead, but those numbers nonetheless are still out there. America is a country where transparency is a virtue and an expectation for our institutions, even if it means airing out our stinkables. That’s how we roll.
America, at least in terms of economic development, is consistently putting its cards on the table, which is essential for having enough trust in our institutions for investments personal and economic growth. Erosion may be happening elsewhere in our institutions, but the transparency with regard to GDP numbers is consistent with the idealistic values that have made America a good place and a world leader.
China isn't acting with that transparency in mind. Under a global order led by a country with that level of secrecy, it's not hard to imagine the consequences for personal liberty and freedom around the world.