China GDP Forecast Revision

Even under optimistic assumptions, growth is going to miss the government’s target.

Figure 1 (updated 5/20): Chinese real GDP, 2019Q1=1 (black), Goldman Sachs previous forecast (blue), Goldman Sachs May 18 forecast (red), IMF April World Economic Outlook forecast (sky blue square), Deutsche Bank May 17 forecast (light green), Bloomberg Economics May 20 (pink triangle). Source: NBS, IMF, Goldman Sachs, Deutsche Bank, Bloomberg Economics, and author’s calculations.

Goldman Sachs (Shan et al., “How to get close to 5.5% GDP growth with a zero-Covid policy?” May 18, 2022) projects a hit to Q2 growth, with recovery in subsequent quarters to q4/q4 growth is largely the same, and slightly less than the IMF’s April World Economic Outlook forecast of 4.8%.

Goldman Sachs’s

“…lower growth projection embeds the assumption that Covid is mostly under control going forward, the property market improves from here, and the government provides substantial policy offset through infrastructure spending in coming months. For example, we expect our augmented fiscal deficit to widen 3pp this year.”

The forecasted Q2 drop is just a manifestation of the negative news in my China sitrep post. [Update 5/19: Deutsche Bank on 5/17 dropped its 2022 Q4/Q4 growth from 4.4% to 3.3% as well, while Bloomberg Economics (Chang Shu & Eric Zhu) forecasts 2%]

Note that I’m taking the official statistics at face value. While I have my doubts, it doesn’t seem that — at least through Q1 — the numbers have had “statistical smoothing” (GS’s euphemism) heavily applied. See Fernald, Hsu and Spiegel’s China Cyclical Activity Tracker:

Source: Fernald, Hsu, Spiegel, accessed 5/18/2022.

The CCAT measure is pretty close to reported GDP, on a y/y basis (for discussion of the quarterly CCAT, see this post).


27 thoughts on “China GDP Forecast Revision

  1. ltr

    May 19, 2022

    Chinese mainland records 212 new confirmed COVID-19 cases

    The Chinese mainland recorded 212 new confirmed COVID-19 cases on Wednesday, with 191 linked to local transmissions and 21 from overseas, data from the National Health Commission showed on Thursday.

    A total of 870 new asymptomatic cases were also recorded on Wednesday, and 45,519 asymptomatic patients remain under medical observation.

    Confirmed cases on the Chinese mainland now number 222,582, with the total death toll from COVID-19 at 5,218.

    Chinese mainland new locally transmitted cases

    Chinese mainland new imported cases

    Chinese mainland new asymptomatic cases

  2. ltr

    May 18, 2022

    China’s renewable energy capacity expands rapidly in first four months

    BEIJING — China’s installed capacity of renewable energy registered fast growth in the first four months of the year as the country strived to reach its carbon peaking and carbon neutrality goals.

    In the January-April period, the capacity of wind power jumped 17.7 percent year on year to around 340 million kilowatts, while solar farms saw capacity hit 320 million kilowatts, an increase of 23.6 percent, according to the National Energy Administration.

    By the end of April, the country’s total installed power generation capacity reached about 2.41 billion kilowatts, rising 7.9 percent from a year ago, the data showed.

    China has announced that it will strive for peaking carbon dioxide emissions by 2030 and achieving carbon neutrality by 2060….

  3. ltr

    May 17, 2022

    China’s higher education enrollment rate reaches 57.8 pct

    BEIJING — The gross enrollment rate of China’s higher education hit 57.8 percent in 2021, compared with 30 percent in 2012, said the Ministry of Education (MOE) on Tuesday.

    Over 44.3 million students are studying at higher education institutions across the country, the ministry told a press conference, adding that China now has the world’s largest higher education system.

    A total of 240 million people in China have received higher education so far, according to the ministry.

    The press conference highlighted the achievements of China’s higher education reform and development over the past decade.

    China’s higher education is at the stage of becoming universal, said Xie Weihe, a professor with the Tsinghua University….

  4. ltr

    May 18, 2022

    China builds world’s largest mobile broadband and fiber optic network

    China has constructed the world’s largest mobile broadband and fiber optic network with network quality reaching the world’s top level, a senior Chinese official said on Tuesday, World Telecommunication and Information Society Day.

    “Fixed broadband has been upgraded from 100 megabits per second to 1,000 megabits per second, and the proportion of optical fiber users has increased from less than 10 percent in 2012 to 94.3 percent in 2021,” Zhang Yunming, vice minister of industry and information technology, said.

    In addition, China has built nearly 1.6 million 5G base stations across the country, accounting for over 60 percent of the global total, making China the first in the world to set a large-scale 5G network based on an independent networking mode, Zhang added.

    The Chinese government has supported the construction of fiber-optic networks in 130,000 villages and 4G base stations in 60,000 villages, raising the rural broadband coverage from less than 70 percent to 100 percent, Zhang said, noting that the country has applied 5G in the fields of transportation, medical care, education, culture and tourism….

  5. Moses Herzog

    All I know is, this Chinn Sitrep stuff and CCAT has the Marvel film franchise sequels beat to hell.

    BTW, I need to update my “Nobody cares or believes” file. Has Kopits updated us on when Xi is being thrown off the terrace at Zhongnanhai?? I need to know when to place my put option on Junior Mints and popcorn.

    1. Barkley Rosser

      Actually pretty witty for once, Mose.

      But remember, only 4 deaths per million over and over.

  6. ltr

    May 19, 2022

    Shanghai Port sees steady recovery of container throughput as COVID-19 under control

    SHANGHAI — As Shanghai steps up resumption of businesses after containing the recent COVID-19 resurgence, Shanghai Port, a major transportation hub, has seen its container throughput recover to over 80 percent of normal capacity.

    According to the Shanghai International Port Group Co., Ltd. (SIPG), the container throughput of the port reached 110,000 twenty-foot equivalent units (TEUs) per day on Tuesday, while its normal handling volume was around 130,000 TEUs per day.

    To tackle logistics bottlenecks caused by COVID-19, especially road congestion, the Shanghai Port has diversified transportation methods in cooperation with shipping companies and the railway department to stabilize supply and industrial chains in the Yangtze River Delta region.

    In April, water transfer accounted for 65 percent of the port’s total throughput, while the proportion of rail-sea intermodal transit also reached a record high, according to the SIPG.

    The port completed a container throughput of over 3.08 million TEUs in April, recovering to 82.4 percent of that of the same month last year, said Li Guoping, an official with the Ministry of Transport, earlier this month.

    During the first four months, the port handled 15.35 million TEUs, up 1.8 percent year on year, added Li.

    For nearly two months, more than 20,000 employees have been working in the Shanghai Port under closed-loop management to maintain its daily operation, said Zhou Yong, a staff member of the production and business department of SIPG.

    The overall operation at all container terminals of the port has remained stable, with the support of an intelligent remote control system that enables the handling of a container to be completed in two minutes on average.

    The Shanghai Port had in advance expanded the container yard to 600,000 square meters, and more sockets for cold-chain containers were installed….

    1. Moses Herzog

      Did I mention during SARS they were also obsessed with spraying surfaces at the university I worked at?? It seemed kinda dumb-ass then as well, especially considering it was some weird concoction composed of mostly guess what???

      ……..Vinegar, and they would spray it in a mist without wiping and let it air dry. There’s no doubt that’s what it was because they told me themselves and I could smell the vinegar and was catching zero chemical smell when I walked in right after they left. Imagine how much laughter I had to contain when they were wearing the full hazmat garb while spraying vinegar mist on school desks non-masked college kids would be using within the next 90 minutes, or probably sooner.

      1. Moses Herzog

        I guess they were like Hyacinth Bucket, they strongly believed in “keeping up appearances”. And they are, believe me, obsessed with keeping up appearances. Again, See W. Edwards Deming’s “red beads test” when trying to fathom mainland China disfunction

    1. ltr

      May 18, 2022

      Biden Health Officials Warn of Substantial Increase in Virus Cases
      The director of the Centers for Disease Control and Prevention urged local leaders and individuals to at least consider returning to wearing masks in indoor public settings.
      By Sharon LaFraniere, Michael D. Shear and Sheryl Gay Stolberg

      WASHINGTON — Federal health officials warned on Wednesday that a third of Americans live in areas where the threat of Covid-19 is now so high that they should consider wearing a mask in indoor public settings. They cited new data showing a substantial jump in both the spread of the coronavirus and hospitalizations over the past week….

      May 18, 2022

      Over 75 Percent of Long Covid Patients Were Not Hospitalized for Initial Illness, Study Finds
      Researchers analyzed the largest database of private insurance claims in the United States in the first four months after a diagnostic code for long Covid was created.
      By Pam Belluck

  7. ltr

    May 19, 2022

    China develops superconducting magnet for world-leading MRI system

    Chinese researchers made a major breakthrough by successfully developing a superconducting magnet for the world-leading magnetic resonance imaging (MRI) system, making China the first Asian country to possess such core technology which was mastered only by the U.S. and UK in the past.

    The research on 9.4 Tesla whole-body MRI superconducting magnet was led by Chinese academician Wang Qiuliang with the Institute of Electrical Engineering under the Chinese Academy of Sciences (CAS), according to a statement published by the CAS on its website on Wednesday.

    Compared with regular 1.5T and 3.0T MRI systems generally utilized in hospitals, the 9.4T whole-body MRI system is able to produce images at a higher signal to noise and resolution ratio with faster image formation, said the statement….

  8. ltr

    But remember, only 4 deaths per million over and over.
    But remember, only 4 deaths per million over and over.
    But remember, only 4 deaths per million over and over.

    [ Remember that precise data on Chinese cases and deaths have been compiled and recorded each day since December 1999, and precision has been critical for limiting the incidence of coronavirus infections in China. The data are of critical importance. I have the data for each day and have often set the data down on Econbrowser.

    Insinuation that the data have been less than comprehensive and correct would be horrid, simply horrid.

    I choose to assume the insinuation was accidental and inadvertent. ]

    1. Barkley Rosser


      I was making fun of you, not suggesting the data was necessarily wrong. I have no idea whether it is accurate or not, although many have questioned the accuracy of various kinds of data coming out of PRC. You have been the one posting that figure so many times I have lost count. Obviously this is to emphasize the positive that is supposed to offset the reported unhappiness of many in China over the strict lockdown policies there, most recently manifested by a reported protest by students at Peking University in Beijing.

      That you have posted on a reported increase in activity at the port in Shanghai also suggests you realize that the strict lockdowns in China have affected the rest of the world as well as on people in China itself, with the lockdowns aggravating the supply chain problems making inflation problems worse in the rest of the world.

      I note that you have long had a propensity to repeat posts, ltr. I made my remark as part of a comment noting humor in a post by Moses, whom I am usually having fisticuffs encounters with. I would hope that you have enough of a sense of humor not to take excessive offense when a long running practice of yours is made fun of. Heck, you used to do this back in the days of Economists View too, back when you posted as “anne.” Amirite?

    1. ltr

      May 17, 2022

      Virus cases in N.Y.C. reach the city’s ‘high’ alert level.
      By Joseph Goldstein

      New York City health officials put the city on “high Covid alert” on Tuesday, after rising case counts and hospitalizations reached a level that could put substantial pressure on the health care system.

      The announcement was triggered by a color-coded alert system that the city introduced in March. But so far, the system has had little impact on the city’s disease control strategy or the public’s perception….

  9. David O'Rear

    I remember SARS, my second up-close-and-personal epidemic (after HIV/AIDS).

    You want to know how bad in was?
    People actually covered their nose and mouth when coughing, and some even stopped spitting on the street.

    Now that’s an indicator!

  10. Bruce Hall

    China may be skating by on the economic front; we’ll see. But they seem to be cutting ties with the US at the highest level:

    The Wall Street Journal reports:

    China’s Communist Party will block promotions for senior cadres whose spouses or children hold significant assets abroad, people familiar with the matter said, as Beijing seeks to insulate its top officials from the types of sanctions now being directed at Russia.

    The ban, outlined in an internal notice by the party’s powerful Central Organization Department, could play a role in Chinese leader Xi Jinping’s efforts to increase his influence at a twice-a-decade leadership shuffle scheduled for later this year.

    Issued in March, the directive prohibits spouses and children of ministerial-level officials from holding—directly or indirectly—any real estate abroad or shares in entities registered overseas, the people said.

    Senior officials and members of their immediate families would also be barred from setting up accounts with overseas financial institutions unless they have legitimate reasons for doing so—such as study or work—the people said.

    It isn’t clear if the rules apply retroactively, but family members of some senior officials have sold shares in overseas companies in order to comply, the people said. It isn’t known if the directive will be made public.

    The directive came as Mr. Xi seeks to minimize geopolitical risks for the Communist Party amid concerns that officials with overseas financial exposure could become a liability if the U.S. and other Western powers impose sanctions against Chinese leaders and their relatives, similar to what was done against Moscow following Russia’s invasion of Ukraine, the people said.

    Perhaps China learned something about how sanctions hurt the Russian elite after the invasion of Ukraine and they don’t want to experience the same thing when they go after Taiwan. If the Chinese were ever going to attack Taiwan, the near future may be a pretty good time when US military munitions/weapon systems stockpiles have been somewhat depleted by send them to Ukraine. It would be much more difficult for the US to take on two adversaries at once and would all but guarantee a severe recession in the West.

  11. AndrewG

    “If the Chinese were ever going to attack Taiwan, the near future may be a pretty good time when US military munitions/weapon systems stockpiles have been somewhat depleted”

    The United States is bad at some things, but military production at a time of war is not one of them. The strategic advantage for the Chinese would be very temporary. I’m more worried about Taiwanese preparedness, which is a long-standing issue apparently.

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