China’s Economy: By the Numbers |
China Power | Economy | East Asia
China’s Economy: By the Numbers
Officially, China’s economy is on the rise yet again. But there are other sources of data to consider.
Moody’s, one of the world’s Big 3 credit ratings agencies, this week confirmed China’s sovereign credit rating of A1, Upper-Medium Investment Grade, and revised its outlook from “Negative” to “Stable.”
For nearly two-and-a-half years, since December 2023, China has had to manage a fiscal environment in which its global outlook was designated by Moody’s as “Negative.” Among other impacts, such designation has called into question China’s credibility as a safe destination for Foreign Direct Investment (FDI), and was perceived by the Chinese as an affront to its self-image as a reliable partner and economic powerhouse.
Now, along with Fitch’s and S&P, the other two Big 3 ratings agencies, China has swept the board of recognition and validation by the world’s most trusted credit ratings organizations.
However, while China’s economic forecast looks rosier than many people might have expected in the wake of tariffs and the oil and gas supply crunch, there are those who express caution when taking official Chinese statistics into account – the same figures that agencies like Moody’s use to give coveted ratings that help build companies and countries alike.
James Lewis, a distinguished fellow with the Tech Policy Program at the Center for European Policy Analysis (CEPA), discussed the issue in his aptly-titled article, “The Funhouse Mirror of Chinese Statistics.” Lewis wrote: “Many comparisons of the U.S. and China that are derived from Chinese statistics are open to question… China is engaged in a long-running influence campaign to persuade the world of its success. China’s surprisingly successful campaign (a tribute to persistence) means that China will tilt any statistics in its favor.”
Those who are familiar with Chinese working environments, whether they be in government or in business, know that the pressure to alter numbers to make them more palatable to Chinese Communist Party leadership may be difficult to resist. Everyday bureaucrats in government, and their counterparts in business, may themselves have little taste for “cooking the books,” but may face disciplinary measures, lack of promotion, or even loss of employment if they don’t comply with expectations from above. Compliance doesn’t always mean willing participation, though, and coercive tactics are common.
The pressure comes from superiors, who themselves have to justify the targets that executive leadership has ordained will occur. Indeed, it is uncanny how often China’s government predictions come true. “China’s government regards more data as ‘state secrets’ than other countries do,” Lewis noted. “…China’s national economic statistics cannot be taken at face value. There is a constant desire to inflate metrics like GDP and to disguise metrics, such as debt levels, that contradict the story that success is inevitable.”
China’s official key economic indicators, despite their often-supposed internal adjustments, are a worthy place to begin understanding the basic shape of the Chinese economy, as long as one keeps in mind that there are significant caveats.
Key economic data shows a GDP growth rate in the first quarter of 2026 of 5 percent (year-on-year). Growth over the last quarter, Q4 2025, was 1.3 percent.
The Nominal GDP for all of 2026 is estimated to be $20.85 trillion. The government is targeting growth between 4.5 percent and 5 percent for the year. Growth is being driven “by strong industrial output, increased infrastructure investment, and robust export performance,” according to Trading Economics.
China’s annual inflation eased to 1.0 percent in March 2026 from February’s 1.3 percent – which represented a three-year high – falling short of market expectations of 1.2 percent.
There was a more worrying signal from unemployment data – widely considered one of China’s most sensitive economic statistics. Trading Economics reported that “China’s urban youth unemployment rate for those aged 16–24, excluding students, rose to 16.9 percent in March 2026 from 16.1 percent in the previous month, according to the National Bureau of Statistics. The increase marked the highest level since November 2025, reversing a downward trend seen since September.” In addition, unemployment “among those aged 25-29, also excluding students, climbed to 7.7 percent from 7.2 percent in February.”
As an Asia Society report........