Indeed. Estimates of China’s economy over the past two years diverge.
According to Beijing, China’s economy grew at an annual rate of about 5% in 2022 and 2023, measured in currency.
The International Monetary Fund (IMF) takes into account that the renminbi has lost between 12 and 14% of its price during this period and paints a different picture. Real GDP declined from 2021 to 2023. (Other Western sources, adding the World Bank and the Federal Reserve, cite similar figures. )
China’s GDP 2014-2023: IMF vs. China’s official version
It turns out that China’s expansion engine has stalled. What happened?
Western economists tend to focus on the usual economic drivers, signals, and trends that are factored into their models: industry figures (mixed signals), debt levels (high), price trends (deflationary), customer demand (weak), customer savings (excessive), trading capacity (overbuilt), fiscal stimulus (insufficient), financial policy (inconsistent). Some see a parallel with Japan’s long era of economic stagnation after the economic crisis of the late 1980s. References to the “Japanization” of China began to proliferate.
All of this would possibly be true. But there is another thing, the Chinese slowdown, which is not part of the Japanization situation. It is absent from the explanations of the leading economists because it escapes the parameters of economic science as such.
The Chinese economy is suffering from the lingering effect of Covid-19.
The reaction of China’s fitness public policy to the Covid-19 outbreak has been incredibly severe. For nearly three years after the outbreak of the pandemic, China enforced a “zero-Covid” policy aimed at “maximum suppression,” which referred to competitive touch tracking. , common mass testing, border closures, large-scale internal quarantine programs, and ultimately entire city lockdowns. Factories and businesses have struggled to maintain their operations. Consumption patterns have been altered as consumers have been prevented from carrying out many of their general activities. Supply chains serving Western consumers have collapsed. The economic damage was significant, as summarized in this report published in October 2022:
Then, in December 2022, China ended 0 Covid.
A consensus of relief has been established; In reality, the Chinese economy would now enjoy a physically powerful recovery. China’s leaders were optimistic, and many Western observers agreed. Goldman Sachs saw the beginning of a new situation in the East.
Goldman’s report titled “After Winter Comes Spring. “
For investors, there would be an advantage. . .
And even hope for the real estate sector there:
These forecasts have proven to be correct in each and every one of the aspects. The renminbi has collapsed. Consumption languished. A deflationary trend has developed. The real estate market has gone from gloomy to disastrous. The Chinese stock market has continued to fall for several years.
Stock markets: US vs China
The failure of the post-Covid recovery is puzzling, and made even more so by the lack of false data on the true effect of Covid in China, before and after the policy change.
What is clear is that the scale of Covid’s effect on the Chinese economy has been far more severe than the official data describes. First reflexively, then proactively, the Chinese government made the decision to hide the truth of the pandemic. of its own citizens and of the outside world. The reason (I think) was an instinctive desire to protect the Communist Party’s reputation for competence, on which its practical legitimacy rests. In the end, they were also wrong.
In this column, I will read about discrepancies and gaps in Chinese knowledge, such as the effects of the pandemic, to show why the official narrative cannot be trusted. In the second part, I will read about tactics in which those gaps can be addressed through other means to get a better sense of the extent of the medical, social, and economic crisis that is still unfolding and that underlies the negative economic situation described above.
COVID-19 has caused the worst global public health emergency in a hundred years. By mid-2023, around 700 million people had been infected worldwide. The World Health Organization (WHO) estimates that 7 million people have died. Other authorities estimates recommend that the number of COVID deaths could exceed 30 million.
COVID-19 has also caused a severe “data emergency” that has hampered efforts to respond to the public fitness crisis and claimed many lives.
Data is essential in any crisis response: timely, accurate and available knowledge, freely shared and updated. As the COVID virus spread rapidly around the world in early 2020, the need for accurate data on the origin, nature, and trajectory of the disease has become pressing. Health professionals and public health authorities, first of all ignoring the nature of the pathogen, were desperately looking for very important knowledge to understand and design its transmissibility, virulence and mutation rates, as well as how to diagnose, treat and save the virus. Governments urgently needed guidance on how to manage the economic, social and political impact of the pandemic.
Epidemiological knowledge was compromised from the beginning. Medical scientists and public health governments around the world have faced gaps and deficits in the availability, integrity, and completeness of information about COVID-19.
Some of these upheavals were the natural result of the confusion created by an unforeseen and evolving crisis. Everywhere, the first months of the pandemic were characterized by great uncertainty and frenzied improvisation. Some of the most important initial knowledge was never properly collected or preserved.
But the worst knowledge gaps arise from active information suppression policies in China, the disease’s country of origin. Some of the most critical knowledge has been withheld, deliberately modified, or even destroyed. These policies have continued to this day.
It is clear that the effect of COVID in China has been and is much worse than what the official statistics describe. In December 2022, after years of “miraculous” luck in controlling the virus (often cited by Beijing as proof of the superiority of the Chinese political system), the country abruptly abandoned its “zero-covid” policy. This suddenly exposed an “immunologically unprepared” population of 1. 4 billion people to the ravages of the highly contagious Omicron variant.
At the same time, the elimination of key knowledge has intensified. China eliminated mass testing and simply stopped publishing some of the maximum statistics. Shortly after China abandoned zero-COVID in December 2022, the New York Times, in an article titled “As Cases Soar, China’s Low COVID Death Toll Doesn’t Convince Anyone,” wrote:
It’s worse today. Even the ultimate fundamental knowledge is now unavailable. As the journal Nature reported in June 2023, “China no longer publishes its COVID-19 case count. “Hundreds of millions of Chinese have fallen ill, and probably millions have died, overwhelming China’s health care. formula and causing social and economic devastation. The crisis has broken the Chinese economy and accelerated the diversification of many Western corporations away from their dependence on Chinese supply chains, a trend that will have an effect on the global economic landscape for decades to come.
China is the source of many primary infectious diseases that have emerged in the last century. The country is therefore on the medical front line of new outbreaks, where the first critical knowledge similar to a new disease is available. Understanding the epidemiological patterns that are emerging in China, which reveals for the first time the symptomatic expression, transmissibility, and virulence of a new infectious agent, is of great importance to government public health in other countries.
Unfortunately, the initial reflex of the Chinese local government is to cover up disorders or hide knowledge that is not compatible with the official scenario. China has a history of public health scandals related to defective vaccines (multiple incidents); and coverage deployments and mismanagement similar to early SARS outbreaks (2003); avian influenza (2004) and (2013); and swine flu (2019).
It’s no surprise that the COVID crisis in China has lifted a curtain of secrecy, active manipulation, and even destruction of knowledge. Researchers and medical staff have remained silent. In the first weeks of the epidemic, those who told the story were persecuted for “spreading rumors” (which is remarkable and tragic in the case of Dr. Li Wenliang). Chinese clinical laboratories have refused to cooperate with foreign requests for COVID knowledge. Official reports on COVID mortality were suspended after April 2020. Even today, Beijing continues to publish COVID statistics that no one believes and that are rejected by most media outlets, foreign governments, and even (according to leaks) some Chinese officials.
However, Chinese government statistics can be tested to reveal some of the true scale of the problem, or at least to show how different the official picture is from reality. There are at least three tactics to assess the plausibility of the official figures:
The COVID-19 outbreak occurred in China in late 2019 and early 2020 in Hubei province and its capital, Wuhan. In addition to silencing medical “whistleblowers,” the Chinese government has been slow to share information that appears to be transmitted from person to person. . However, after some initial confusion, the knowledge-gathering procedure appears to have functioned almost normally, with no apparent manipulation, over the following months. China’s infection and mortality figures for the first quarter of 2020 now seem plausible, i. e. , they are in line with early reports from other countries.
Then, in April 2020, Chinese COVID reports froze.
COVID mortality over the next 22 months is officially non-existent. In February 2022, a small cluster of deaths was reported, due to the inclusion of mortality figures from Hong Kong (which had more open reporting policies). However, with the exception of Shanghai’s outbreak in the spring of 2022, China reported no new deaths on the mainland between mid-April 2020 and December 8, 2022, when the zero-COVID policy was rescinded. Even when the Omicron variant arrived in Shanghai in the spring of 2022, leading to the deaths of tens of thousands of people. of reported infections and a nearly total 3-month lockdown of a city of 25 million people, the government reported only 3 COVID deaths (later revised to ten).
After further confusion and testing suspensions, the zero-Covid order was lifted and the government adjusted the death toll to around 90,000. Then, in March 2023, the official daily death rate fell back to near zero.
New Covid deaths reported in China
This trend is an epidemiological impossibility. A pathogen as virulent as COVID-19, especially the Omicron variant, considered “30 times more contagious than the ancestor of SARS-CoV-2,” may not go away. While moderate, the Chinese government’s strict pandemic controls reduced COVID-19 infections and related deaths between mid-2020 and the first Omicron outbreak in the country in January 2022, the long periods of 0 in the knowledge record for 2022, when Omicron outbreaks were a constant struggle, are evidence that the knowledge of COVID mortality in the continent. China has been and continues to be eliminated.
China’s reported death rate – that is, the number of deaths compared to another 100,000 people – is incredibly low.
Death rates in Hong Kong, Taiwan, and Korea (countries that have followed strict zero-COVID policies) are between 1,600 and 4,000 times higher than the COVID death rate reported through China for the April 2020 era (when Covid reporting stopped). until December 2022 (when zero-COVID ended).
Covid mortality: China vs. comparable
Even if it can be argued that mainland China has followed a stricter zero-COVID edition, this cannot justify this astronomical discrepancy.
By updating this data to include deaths reported after the end of Zero-Covid, the New York Times amassed data on COVID infection rates and death rates from the start of the pandemic through March 2023. Unlike many other sources, the Times’ knowledge base provides separate figures for the mainland: China, Taiwan and Hong Kong. (Singapore and New Zealand have also followed very strict zero-COVID diets and are included here as well. )
The difference in reported infection rates is extreme: 132 times higher in Hong Kong than on the mainland.
Covid infection rate: China relative to comparable countries
In addition, the updated mortality figures in the Times study remain incredibly low.
Covid: China’s death rate vs. comparables, including post-zero-Covid figures
Hong Kong is the most productive comparable. Overall, Hong Kong has followed a strict zero-COVID program, similar to mainland China. However, despite this, and despite the fact that fitness spending has increased more than five times what is consistent with the capita (around $3,030 for Hong Kong alone). , compared to China’s $583 total (a figure that includes Hong Kong), which should have improved treatment outcomes, Hong Kong reported one COVID death, a rate 30 times higher than the mainland.
Covid mortality observed
These glaring disparities are indicative of a vast programme of systematic under-reporting. It was reported that health personnel were urged to “exclude ‘COVID-19’ from the death certificate to restrict the reported figures. “The mortality figures have been published “accidentally” through local media. government, then temporarily retracted. In December 2022, the central government replaced the official criteria for assigning COVID as a cause of death. The British Medical Journal reported that at the end of 2022
In July 2023, some Chinese provinces even suppressed all mortality data, to reveal peripheral data (e. g. , figures on cremations well above general levels) that can be used simply to infer the true scale of the crisis.
This is the ultimate decisive evidence of knowledge manipulation.
The case fatality rate (CFR) counts COVID deaths as a percentage of the cases shown. A clinical study by researchers in Hong Kong and Shenzhen cited the following figures related to COVID infection and death rates in mainland China:
This equates to a case fatality rate of 1. 5 percent, which is not comparable to that of other countries. (The case fatality rate in EE. UU. es 1. 1 percent, according to Johns Hopkins data. )However, 88 percent of reported Chinese deaths occurred in the first 3 months. After mid-April 2020, the case fatality rate was only 0. 2 percent.
Even that doesn’t tell the full story. Over two years, between April 21, 2020, and April 21, 2022, the Chinese government reported 111,195 COVID cases, but 16 deaths. This equates to an incredibly low CFR of 0. 01 percent. (These are all official Chinese government statistics. )
This is even more significant than the disparities between countries in infection and mortality rates. The main argument in favor of China’s 0-COVID policy is relief in the number of infections, not relief in mortality after an infection. Assuming 0 COVID is effective, a decrease in the infection rate can be considered simply as an imaginable end result; and in fact, some 0-COVID or “elimination” diets in other countries show these final results, as long as such regimens are maintained. However, once an individual is infected, 0 COVID has no effect on mortality. The policy does not imply any improvement in the effectiveness of COVID treatment. Therefore, China’s CFR deserves to be more or less similar to that of other countries.
That’s what we’re seeing. For example, the CFR in Hong Kong (a non-COVID jurisdiction, with cultural and ethnic characteristics closer to the mainland) is 33 times higher. The global CFR is 63 times higher.
This is prima facie evidence of falsification of knowledge. Zero-COVID aims to prevent the spread of the virus in order to decrease infection rates – it has nothing to do with a treatment. In other words, we expect a decrease in the rate of infection. but not a decrease in the case fatality rate. There is no evidence, not even any claims, that China has developed amazing strategies to treat COVID that reduce the death rate among infected people.
In short, as The Economist said in 2023, “official statistics are useless”.
Workers place barriers outside the closed Huanan Seafood Wholesale Market as a stopover for members of the World Health Organization (WHO) team investigating the origins of the Covid-19 coronavirus in Wuhan, central China’s Hubei Province, Jan. 31, 2021. (Photo via Hector RETAMAL/AFP) (Photo via HECTOR RETAMAL/AFP via Getty Images)
In the second part of this analysis, we will look at other approaches taken to provide a more realistic estimate of Covid’s effect on public health in China.
For more information, see component 2 of this research, here:
This column is based on an essay commissioned last year through the Heritage Foundation, which can be found at https://www. heritage. org/CTP.
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My professional moment: In 2003, I joined the Stevens Institute of Technology, where I created and oversaw a number of systems in quantitative finance and similar fields. I’m the Executive Director of the Hanlon Financial Systems Research Center at Stevens. I am also a Co-Principal Investigator of a recently awarded Plans Grant through the National Science Foundation to create a center for cooperative studies between industry and university focused on monetary science and technology. I’m the author of several e-books on wireless technology and my new book is called Price.
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I can be reached by email at gcalhoun@stevens. edu.
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