The White House economic adviser, Kevin Hassett, stated during an interview with CNBC on Monday that there is a significant amount of “uncertainty” in China’s actual economic data.
He expressed concerns about the accuracy and transparency of the economic data officially released by the Chinese Communist Party, believing that this could complicate global economic analysis.
Amid ongoing trade tensions, Hassett’s views have deepened suspicions among the public regarding the reliability of China’s economic statistics.
The latest data released by the National Bureau of Statistics of China on the 9th showed that the Producer Price Index (PPI) in June fell by 3.6% year-on-year, marking the largest decline in two years, while the Consumer Price Index (CPI) rose by 0.1%.
However, a report from Nomura Securities on the 9th indicated a turning point in the Chinese economy mid-year, particularly highlighting an impending “cliff-like decline” in demand.
Nomura Securities’ Chief China Economist, Lu Ting, mentioned in the report that due to tariff risks, some Chinese enterprises engaged in “export hoarding” in the first half of the year, leading to a visible overconsumption effect in the latter half. The Chinese real estate sector has entered its fifth year of contraction, with recent trends showing a sharp decline in both sales volume and prices, resulting in continued drops in real estate investment and sales, imposing a significant drag on domestic demand.
The report warned of the potential further intensification of deflationary pressures in China, with ongoing negative growth in the PPI, putting pressure on business profits and further dampening investment willingness.
Hassett also mentioned during the interview that Brazil is redirecting Chinese goods to the United States amid international trade issues. He stated, “We will wait and see how negotiations with Brazil progress.”
He reiterated that based on Gross Domestic Product (GDP) data, the U.S. economy is not overheated. Import prices in the United States are declining according to customs data, and it is projected that with increasing domestic output in the U.S., inflation pressures will dissipate.
During the interview, Hassett criticized the Federal Reserve, stating that it had made “very big mistakes” regarding tariff issues.
He added, “We will see how the Federal Reserve addresses the ‘overspending’ in the economy,” and suggested that “we must rethink the actions of the Federal Reserve.”
Hassett called on Congress to strengthen its oversight of the Federal Reserve, particularly in its construction expenditures.
On Sunday (the 13th), during an interview with NBC, he indicated that the Trump administration is considering whether it has the authority to dismiss Federal Reserve Chairman Powell, stating, “If there are valid reasons, the President certainly has the right to do so.”
Last week, Russell Vought, the Director of the White House Office of Management and Budget, sent an inquiry letter to the Federal Reserve, requesting responses to a series of questions regarding a renovation project within 7 working days. The White House reported that a $2.5 billion project at the Federal Reserve headquarters exceeded its budget by $700 million.
U.S. media reported on Monday that Powell had requested the Federal Reserve’s Inspector General to review the $2.5 billion renovation project.
The U.S. Consumer Price Index (CPI) and Producer Price Index (PPI) are set to be released on Wednesday and Thursday this week, with both expected to rise by 0.3% month-on-month. If the data continues to weaken, the pressure on the Federal Reserve Chairman will intensify even further.