China's Overstated Official GDP Figures Raise Doubts About Financial Health: Report

(MENAFN- IANS) Mumbai, Jan 16 (IANS) China's real GDP growth in 2025 is expected to be at about 2.5-3 per cent, far below the government's stated target of around 5 per cent, raising critical questions about the true health of the world's second-largest economy, the reliability of official statistics, a report has said.

The report from Mizzima News said that the gap is driven mainly by a sharp decline in fixed assets and property investment, persistent producer‐price deflation, and enduring weakness in domestic demand, which could slow growth further in 2026.

It cited estimates of the US-based Rhodium Group's analysis and said Beijing's data for the first three quarters showed 5.2 per cent year‐on‐year expansion, which also stands in sharp contrast to the independent estimate.

The Rhodium Group predicted China's growth to slip to between 1-2.5 per cent, well below international projections such as those from the International Monetary Fund (IMF), which estimates around 4.5 percent growth next year.

The report highlighted that fixed‐asset investment turned negative by mid‐2025, and a collapse in property sector investment dragged down broader capital formation.

Producer prices have been in decline for more than three years, and consumer spending posted only marginal gains late in 2025, which indicated weak domestic demand, the report said.

While headline inflation in China showed a modest rise toward the end of the year, broader price data reflect enduring weakness in domestic demand and continued deflationary pressure at the producer level, the Myanmar-based media house said.

"Combined with shrinking investment, these trends suggest that households and firms are increasingly cautious, an indicator of broader malaise beneath the surface," the report said.

The report said that stark divergence between independent estimates and official figures has amplified calls for transparency and robust statistical methodologies.

Critics argued that the official narrative may overlook these gaps, particularly during periods when leaders are under pressure to maintain confidence and project economic stability.

“While foreign trade has helped sustain the headline numbers, reliance on external demand exposes domestic vulnerabilities and raises questions about the sustainability of growth,” it noted.

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