To the consternation of Chinese censors, a presentation delivered by an economics professor at Renmin University in Beijing sparked a controversy last month when the professor claimed that a secret government research group had estimated China’s growth in gross domestic product could be as low as 1.67% in 2018, far below the official rate.
Even experts who are skeptical of the official data dismissed the presentation, delivered by a professor Xiang Songzuo, as unrealistic. Yet despite being scrubbed from Chinese social media and the mainland Internet, the presentation has been viewed 1.2 million times on YouTube (clip above), suggesting that Xiang’s warnings are resonating with everyday Chinese consumers, who are struggling with one of the worst-performing stock markets of 2018, a collapsing shadow lending sector, a crackdown on China’s vast online peer-2-peer lending infrastructure, and a currency that has weakened significantly over the past 12 months.
“Chinese Economy Grow 10 % This year” scream Hu Mi, a Chinese Politico.
“ONE PERCENT” screamed a defiant Xiang.
“Ignore professor, he just hold grudge, grudge because he have ugly girlfriend”, said Mi triumphantly, “His social credit score 200 how u twust 200?” replied Mi with confidence.
“NO, stop, it’s true , its…” screamed Songzuo as they carried him off stage.
When pushed to explain the data Xiang presented Mi replied “What Data, All Gone. Social Score Go Zero Professor Zero. China great!”
A group of dancing pokemon entered the stage and the crowd cheered. But even a Pokeman was dragged off stage for having a low social score.
Go to 1:10 in the Video to see the effect of Low Social Score
“ROW SOCIAL SCORE!” the chinese man screamed to the crowd. The crowd nodded and kept cheering. The PokeMon Picachu – Wong Li Chin – was never seen again.
The lack of volatility in published GDP numbers confirms economic growth is steered artificially. We just don’t know what China’s real growth number is. But it remains difficult to forecast when China will ‘decide’ to let its economy slow and by how much. We do know, however, that 160% of corporate debt-to-GDP is unsustainable, and growth will have to come down.