2022 was not a good year for the Chinese economy. In 2022, the COVID-19 epidemic, which started in December 2019, caused significant economic disruptions in the second quarter, especially in Shanghai, resulting in a real rate of growth for the Mainland economy of only 3.0% for the year as a whole. This is the second lowest annual rate since economic reform and opening began in 1978.

Recently the National Bureau of Statistics of China (NBSC) reported a rate of growth of real GDP of 6.9% for 2017, a slight increase from the 6.7% in 2016. This announcement was welcome by much of the world but it was also met with the usual skepticism in some quarters, especially because of the recent voluntary revelations by certain regions that they had been over-stating their economic data in the past.

At the 19th Communist Party Congress, President Xi signaled a move away from the longstanding tradition of setting annual GDP growth targets. This shift reflects a necessary recognition of China’s transition away from the ultra-rapid growth rates of the previous three decades. However, this policy change may also signal a desire to minimize perverse incentives for local party officials to distort economic data and pursue otherwise-useless development projects to boost growth figures.