Two critical online views on China’s economy vanish ahead of policy meeting
2024.12.06 05:38
BEIJING (Reuters) – A bearish commentary by a prominent economist on China’s weak consumption, unemployment and “dispirited” youth that went viral on social media has vanished from the country’s tightly controlled internet.
The loss of access to the comments by Gao Shanwen, chief economist at state-owned SDIC Securities, come ahead of a meeting of Chinese leaders this month to set the economic agenda for 2025, including growth targets.
China’s economy has struggled for momentum this year largely due to a prolonged property crisis, high local-government debt and sluggish consumption, prompting various measures by Beijing to stimulate the economy.
Gao said on Tuesday that China’s youth are dragging down consumption due to high unemployment, while spending among older people has plateaued since the COVID-19 pandemic.
“The younger a province’s population, the slower the consumption growth,” he said at an invitation-only investor conference, according to a transcript of his speech.
He spoke of China’s “dispirited youth” and its “disenchanted middle-aged” and also estimated that China’s GDP growth may have been overstated by 10 percentage points between 2021 and 2023.
Gao’s speech was shared online and went viral on social media, but access was later blocked. Local online news reports that had carried his comments were also not accessible.
Attempts to follow Gao’s blog on WeChat, or reach him there, were blocked by the platform with a notice that the account had violated rules.
Telephone calls to Gao went unanswered. Reuters has sought comment from Tencent Holdings (OTC:), which runs WeChat.
China’s ruling Communist Party exerts a high degree of control over domestic media and social media platforms in the name of safeguarding social stability and preventing the spread of rumours and fake news.
Reports and public discussions on what the party considers as sensitive and potentially disruptive to social order are also routinely removed from the internet, including views critical of the economy and any veiled criticism of policymakers.
ONLINE CAMPAIGN
In a similar case, access to a video social media account of Fu Peng, the chief economist at Northeast Securities, was blocked after comments he made in September at a conference.
Fu said weaker consumption stems from falling property prices, leaving some middle-class homeowners with negative equity, according to media reports. Such losses, given real estate’s dominance in household wealth, cannot be offset by other income sources, he said.
He questioned if an increase in middle class consumption in the past decade had been driven more by the wealth effect of higher property prices than rising incomes.
“If it was driven by rising incomes, say, salaries increasing from 10,000 yuan to 20,000 yuan, and then doubling to 40,000 yuan – there would be no issue.
“If the consumption upgrade of the past decade was based on the wealth effect created by rising real estate prices, then that is a very dangerous signal.”
When Reuters checked Fu’s account on Friday, a notice said access had been blocked. Reuters has asked Tencent for comment but could not find contact details for Fu.
In October, the Cyberspace Administration of China – the country’s cyberspace regulator – said it had launched a special campaign to better regulate online news and information and would “rectify” any illegal conduct, following increased scrutiny over independent content creators online including commentaries.
The administration did not immediately respond to a request for comment.
Ahead of this month’s annual economic work conference, state newspaper People’s Daily said that China is not wedded to achieving specific GDP growth rates.
A pace of less than 5% for the economy is acceptable as there is no need for the “worship of speed”, it said on Wednesday.
Reuters reported last month that government advisers were recommending that Beijing should maintain an economic growth target of around 5.0% for next year.
