On Wednesday (July 15th), the Chinese Communist Party (CCP) will release the economic growth data for the second quarter. However, economists are expressing pessimism about the actual GDP figures in China.
According to a report by the Financial Times on Tuesday (14th), the decline in monthly economic data in China has raised questions about the discrepancies between these indicators and GDP growth rates.
Recent monthly data shows that economic pressure is increasing, with retail sales declining and fixed asset investment once again falling into a slump.
The CCP’s officially announced GDP growth rarely deviates from its predetermined goals, even if it means manipulation to “achieve” them. The GDP growth target set by the authorities for this year is between 4.5% and 5%.
Unlike other major economies, such as the International Monetary Fund (IMF) has repeatedly pointed out, China’s GDP data lacks expenditure breakdowns and detailed data on quarterly consumption, investment, and net exports. The CCP only provides monthly percentage changes of these data.
Analyst Logan Wright of Rhodium Group mentioned that the CCP’s monthly data for the second quarter shows a “significant deterioration” in the economy, especially the impact of rising prices due to the Iran conflict.
Wright pointed out that the three essential components of China’s GDP – investment, consumption, and net exports – are showing little to no signs of growth.
“The gap between China’s actual performance and the reported data is widening,” he told the Financial Times.
Wright even added, “In my twenty years of researching the Chinese economy, I have never encountered any Chinese official who would defend the GDP data when questioned about it.”
He boldly predicted that the real economic growth rate in China for the second quarter will be between 0% and 1%, far below the official expectations.
Carsten Holz, an economics professor at the Hong Kong University of Science and Technology who studies Chinese statistics, stated that the statistics will inevitably reflect the “policy goals” of the CCP’s central leadership, as Beijing will adjust local data and data collection methods to achieve these goals.
“We are almost groping around in the dark and can only passively accept whatever they give us,” Holz said.
Chinese Premier Li Keqiang did not rule out the possibility of taking new measures during a discussion with experts and entrepreneurs on Monday (13th). The CCP Central Political Bureau will convene a meeting this month that may provide more clues for the next macroeconomic policies.
Below is an analysis of the monthly data officially released by the CCP.
China publishes monthly cumulative growth data for fixed asset investment (from the beginning of the year to the present), including real estate development and infrastructure projects. Despite a slight decline in 2025, this indicator has almost always remained positive since the slowdown in the Chinese real estate market.
As of the end of May 2026, the fixed asset investment index showed a year-on-year decline of 4.1%. This recurrence of a weak trend raises questions about how the growth data will reflect this situation.
Due to the slowdown in the real estate market and its impact on consumer confidence, retail sales in China are showing signs of weakness again.
This data only covers goods and catering industries, with a 0.6% decrease in May compared to the previous year, marking the first decline since 2022. A month ago, the data had only increased by 0.2%.
The data released on Tuesday shows that China’s exports in June increased by 27% year-on-year in US dollars, while imports increased by 36%.
Julian Evans-Pritchard, an economist at Capital Economics, stated that the surge in semiconductor prices driven by the AI boom was the primary driver of China’s export growth in June. However, this has also exacerbated the divergence between various sectors of China’s macroeconomic economy.
In the first five months, profits of Chinese electronic product manufacturers and non-ferrous metal (such as copper, aluminum) manufacturers more than doubled year-on-year, thanks to strong demand driven by AI and renewable energy development. In contrast, profits of furniture and ferrous metal (including steel) manufacturers plummeted by at least 37% during the same period.
In recent years, CCP official data shows that China’s urban unemployment rate has been maintained between 5% and 5.5%. Last week, policymakers for the first time in decades did not set a specific numerical target for new urban job positions over the next five years but aimed to keep the unemployment rate below 5.5%.