Data on the blink
China decided this week to suspend its publication of youth unemployment data. Its Beijing-controlled bureau of statistics sought to justify the move by saying it was done to improve this indicator. Earlier, China had quit publishing its consumer confidence index.
Its data releases on foreign direct investment have also turned sporadic. Given that its economy is in a slump, this secrecy heightens suspicions that the government wants to hide bad news. Its youth joblessness had hit a record of 21% plus in June, four times the overall rate, before this signal went on the blink.
Gross domestic product is widely expected to grow under 5% this year. Weak prices have pushed it into deflation. Other indicators also paint a bleak picture, one that Beijing is clearly trying to underplay.
A rate cut this week by the Chinese central bank suggests that monetary policymakers worry about the damage falling prices can do under conditions of a debt overload. In the case of a deflation spiral, not only will spending be deterred, payback burdens would soar. When economic uncertainty rises, reducing risk requires more data, not less, to guide policymakers and public market participants alike.
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