Opinion - A ‘tofu-dreg' edifice: Most of China's official economic data is probably fake
China reported remarkable economic growth of 5.4 percent in the first quarter of 2025. Its growth is fascinating, since it far outstripped all large economies.
It is also noteworthy because it comes amid China's collapsing real estate bubble, stagnant growth in its second-largest export market (Europe), negative growth in its top export market (the U.S.), falling domestic population and deflation.
How did China achieve this miracle? The answer is simple — it didn't.
For at least a decade, China's growth story has been a triumph of propaganda and a testament to the willingness of lazy, gullible western journalists and institutions to accept it. In truth, whether we're talking GDP, economic growth, deflation or demographics, the official Chinese data is a tofu-dreg edifice that cannot mask China's severe underlying societal problems.
China's official growth statistics are reminiscent of Bernie Madoff's quarterly updates to his clients. For decades, the high-priced con artist delivered a stream of steady investment returns. Markets went up, markets went down, yet Madoff delivered with barely a hiccup. Investors and journalists thought he was a genius.
Yet his very consistency was actually evidence of fraud.
Likewise, the western media and financial establishment have swallowed whole the idea that China and its increasingly central-planned economy is a genius model that can do no wrong. China's claims that it hits or exceeds its growth targets over and over and over continue to be accepted at face value.
Even in years where it is impossible to fake a 5 percent growth rate, China's claims remain absurd. In the COVID year of 2020, China claimed over 2.2 percent growth, even as the world economy (despite including this likely-fudged Chinese data) shrank by nearly 3 percent.
Independent researchers have become wise to this fraud. Alternate measures suggest that China's economy may have declined in 2023, rather than grown by the government-targeted 5 percent. Research from the University of Chicago suggests that China's economy may be as much as 60 percent smaller than officially reported.
Even if one accepts Chinese data, a portion of the reported growth is economically useless. With overbuilt infrastructure and vast swaths of empty apartment buildings, China has embraced a version of Bastiat's broken window fallacy — where any type of economic activity, including construction of useless assets, counts the same as real or useful economic activity.
China and its ruling clique, the Chinese Communist Party, are continuing a long tradition of communist or socialist authoritarian nations faking economic statistics. Historian Tony Judt discussed this in his tome 'Postwar,' wherein he exposited on the bankruptcy of communist Eastern Europe, offering up decades of statistical claims later proven to be lies.
Clearly, Karl Marx left out fraud as a fundamental tenet of communism.
As bad as Chinese economic growth statistics are, China's population and demographic data may be worse. Although the economic data are presumed merely inflated to conceal slower growth, the population data likely conceal a demographic disaster that is gaining speed every day.
Dr. Yi Fuxian of the University of Wisconsin, an expert in China's demographics and prominent critic of that country's one-child policy, has been digging into the details of China's population claims — and what he has found is not good.
For starters, Yi believes that China's population is overestimated by at least 130 million — more than one-third of the U.S. population. In a recent monograph, Yi details the many discrepancies buried within China's current and past census data.
For example, China requires a tuberculosis vaccine for all newborns — data that allows researchers to cross-check the reported number of births. The data matched official birth statistics in 2009 and 2010. But by 2018, the 6.21 million reported vaccination doses implied at best 9.9 million births, far less than China's claimed 15.23 million births.
The 2019 and 2020 data had similar large discrepancies.
In another data point, China reported 13.79 million children under the age of one in 2000. Yet the 2010 census claimed there were 14 million 10-year-olds. But the magical appearance of a quarter-million children had expanded by 2014, when the number of ninth-graders (a direct analogue to age 14) was reported as 14.26 million.
At every level of China's government, there is every incentive to fake population numbers. Local governments are highly dependent on fiscal transfers from the central government. Higher populations mean more money.
Yet this research is not necessary to know that something is fishy in the Chinese data. China's fertility rate fell below replacement (2.1 children per woman) in 1991 and quickly fell further to 1.522 in 1998. After 1998, the data starts to look strange.
Fertility, we are to believe, stopped falling in 1998, despite ever rising wealth, education and urbanization — all factors directly correlated with lower rates of reproduction. In fact, the rate supposedly increased by more than 15 percent from its low in 1998 to 2012. This makes no sense. Not only is this rise completely counter to experiences throughout the world, it is strongly against what happened in culturally similar societies in East Asia.
Furthermore, China maintained its one-child policy through 2013. A fertility rate over 1.5 implies either a majority of women were having two children or a substantial number of women were having three or more children. And natural decrease has not been balanced by immigration — according to publicly available data, China has had a net outflow of migrants every year since 1960.
The gathering demographic erosion of China is not some historical curiosity. It implies a fast-aging population with less dynamism and an increasing social welfare burden. Shifting demographics removed Japan as an economic competitor to the U.S. in the 1990s, and the same dynamic is at work against China. China's average age is already higher than that of the U.S.
China remains a dangerous county. American officials and President Trump must understand that opening up China to U.S. exports is not a very good trade-off. Increasing demographic and economic pressures are likely to make China more aggressive in the near-term.
Auguste Comte once said; 'Demography is destiny.' For China, that destiny — aging and economic atrophy — is here, and it is a serious problem for China and the world. But determining how to handle it requires an embrace of facts over official fictions.
Keith Naughton is co-founder of Silent Majority Strategies, a public and regulatory affairs consulting firm, and a former Pennsylvania political campaign consultant.
Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
4 hours ago
- Yahoo
Beijing official overseeing Hong Kong warns of persisting national security threats
HONG KONG (AP) — A top Beijing official overseeing Hong Kong affairs on Saturday warned of persisting threats in the city as a China-imposed national security law approaches its fifth anniversary, while seeking to allay concerns about the law's impact on the financial hub's openness. Speaking at a forum about the law, attended also by the city leader John Lee and other officials, Xia Baolong, the director of China's Hong Kong and Macao Work Office, said various forms of soft resistance continue to emerge in new forms and external forces have never ceased their intervention in Hong Kong. 'Hong Kong has transformed from chaos to order. But just as a tree desires stillness, the wind continues to blow," Xia said. The Beijing and Hong Kong governments deemed the law necessary to maintain the city's stability following anti-government protests in 2019. Under the law, many leading pro-democracy activists, including Jimmy Lai, founder of the now-defunct Apple Daily newspaper, were prosecuted. Dozens of civil society groups disbanded. This month, authorities have stepped up their crackdown, including charging young activist Joshua Wong, who was already sentenced last year over a subversion case, under the law for the second time and targeting a mobile game app. Last week, China's national security authorities in Hong Kong and the city's police launched their first publicly known joint operation, raiding the homes of six people on suspicion of colluding with foreign forces to endanger national security. Critics say the political changes indicate that the Western-style civil liberties Beijing promised to keep intact when the former British colony returned to Chinese rule in 1997 are shrinking. But Xia said the law only targeted an extremely small number of people who severely endanger national security. He also sought to allay concerns about Hong Kong's openness and international position. He insisted that normal international exchanges do not violate Hong Kong's national security law but rather are protected by it.
Yahoo
4 hours ago
- Yahoo
Arrest of Chinese nationals in swing state, Israel's fight with Iran are 'wake up' call on CCP threat: experts
Recent arrests of Chinese nationals at the University of Michigan have resurrected concerns about CCP-owned farmland and property in the United States, particularly in Michigan, and caused some to draw parallels with the current conflict between Iran and Israel. Earlier this month, two Chinese nationals were charged with allegedly smuggling a "dangerous biological pathogen" into the U.S. to study at the University of Michigan in an incident that FBI Director Kash Patel described as a "sobering reminder that the Chinese Communist Party (CCP) continues to deploy operatives and researchers to infiltrate our institutions and target our food supply, an act that could cripple our economy and endanger American lives." Later, a third Chinese national with connections to the university was arrested, renewing questions about China's efforts to infiltrate and influence various sectors in the United States, including buying up farmland, which has been a growing concern nationwide. A 2023 report from the United States Department of Agriculture found that "foreign persons held an interest in nearly 45 million acres of U.S. agricultural land," which represents 3.5% of all privately held agricultural land and 2% of all land in the country. New Legislation Aims To Tell China 'No' On Buying Up American Farmland While China is not at the top of the list of countries in that report, the arrests in Michigan have prompted calls from Congress to ensure that the CCP, viewed by many as the nation's top geopolitical adversary, is not buying up farmland in the United States. Read On The Fox News App Republican Sen. Pete Ricketts exclusively told Fox News Digital this week that China has been aggressively buying American agriculture, "which is why we need to have a heightened sense of vigilance around protecting our homeland." Ricketts, along with Democratic Sen. John Fetterman, introduced the bipartisan Agricultural Foreign Investment Disclosure (AFIDA) Improvements Act that seeks to implement recommendations published by the Government Accountability Office in January 2024, which found the AFIDA was ill-equipped to combat foreign ownership of American agricultural land. "China's land purchases aren't just about acreage—they're about access," Michigan GOP Rep. John Moolenaar, chairman of the House Select Committee on the Strategic Competition Between the United States and the CCP, told Fox News Digital. "Even small parcels near military bases or critical infrastructure pose serious national security risks. In my home state, we've seen concerning cases like Gotion's site near Camp Grayling. We need full transparency into who's buying land and where—because the Chinese Communist Party shouldn't be allowed to hide behind shell companies to gain a foothold in our country." Fbi Director Patel Leads Charge To Root Out Chinese Influence On Us Soil China's encroachment into Michigan's agriculture was enough of a concern for Republican state Rep. Gina Johnsen to introduce legislation earlier this year banning foreign adversaries from buying up farmland. "Our state's agricultural industry is a pillar of our economy. My community is an agricultural community," Johnsen said. Our farms provide food security, jobs, and economic stability for countless residents. However, there is growing concern about losing our farmland to countries of concern." Additionally, Chinese farmland has become a topic of conversation in the wake of revelations that Israel's attack on Iran's nuclear capabilities was aided by years of covert planning, surveillance and infiltration by Israeli intelligence. Code-named "Am Kelavi" (Rising Lion), the preemptive operation was the product of unprecedented coordination between the Israeli air force, the Military Intelligence Directorate, the Mossad and the country's defense industries. For years, they worked "shoulder to shoulder" to gather the intelligence files needed to eliminate Iran's most sensitive military and nuclear assets. As part of that operation, Israel was able to establish a drone base inside Iran, where Mossad operatives retrieved them from hiding spots to use against Iranian sites. Bryan Cunningham, president of Liberty Defense and former CIA intelligence officer, told Fox News Digital that the Israeli operation is a "wake-up call" for the United States about what a foreign adversary like China could potentially carry out in the United States. "As an intelligence officer, part of me says, I wish that the sources and methods of building these drone factories inside the target countries hadn't been revealed," Cunningham said. "But on the other hand, it does serve as a wake-up call, hopefully for our policymakers, and it also ties in, and if I were the administration, I would make this tie in immediately and loudly with the Trump administration's border strategy." Cunningham continued, "Our borders are where you're most likely to actually intercept these kinds of toxins, explosives, flares, 3D-printed weapons, ceramic weapons, whatever it is. So if it were me and I were the Secretary of Homeland Security, I would be tying this all together. You know, it is important to get people out of the country that have committed violent or other serious crimes in the country, but it's also really important to prevent people like these guys from bringing in those kinds of materials." The FBI is increasing its surveillance of Iranian-backed operatives inside the United States as Trump weighs strikes, a senior law enforcement official told Fox News on Friday. Fox News Digital's Deirdre Heavey, Lucas Tomlinson and Efrat Lachter contributed to this article source: Arrest of Chinese nationals in swing state, Israel's fight with Iran are 'wake up' call on CCP threat: experts
Hamilton Spectator
6 hours ago
- Hamilton Spectator
Beijing official overseeing Hong Kong warns of persisting national security threats
HONG KONG (AP) — A top Beijing official overseeing Hong Kong affairs on Saturday warned of persisting threats in the city as a China-imposed national security law approaches its fifth anniversary, while seeking to allay concerns about the law's impact on the financial hub's openness. Speaking at a forum about the law, attended also by the city leader John Lee and other officials. Xia Baolong, the director of China's Hong Kong and Macao Work Office, said various forms of soft resistance continue to emerge in new forms and external forces have never ceased their intervention in Hong Kong. 'Hong Kong has transformed from chaos to order. But just as a tree desires stillness, the wind continues to blow,' Xia said. The Beijing and Hong Kong governments deemed the law necessary to maintain the city's stability following anti-government protests in 2019. Under the law, many leading pro-democracy activists, including Jimmy Lai, founder of the now-defunct Apple Daily newspaper, were prosecuted . Dozens of civil society groups disbanded. This month, authorities have stepped up their crackdown, including charging young activist Joshua Wong , who was already sentenced last year over a subversion case, under the law for the second time and targeting a mobile game app . Last week, China's national security authorities in Hong Kong and the city's police launched their first publicly known joint operation , raiding the homes of six people on suspicion of colluding with foreign forces to endanger national security. Critics say the political changes indicate that the Western-style civil liberties Beijing promised to keep intact when the former British colony returned to Chinese rule in 1997 are shrinking. But Xia said the law only targeted an extremely small number of people who severely endanger national security. He also sought to allay concerns about Hong Kong's openness and international position. He insisted that normal international exchanges do not violate Hong Kong's national security law but rather are protected by it. Error! Sorry, there was an error processing your request. There was a problem with the recaptcha. Please try again. You may unsubscribe at any time. By signing up, you agree to our terms of use and privacy policy . This site is protected by reCAPTCHA and the Google privacy policy and terms of service apply. Want more of the latest from us? Sign up for more at our newsletter page .
