CCP Claims Economic Recovery, Economist Labels It a ‘Zombie Economy’

‘There is no way to prevent the economy from continuing to decline,’ one economist said.

News Analysis

Newly released official data from the Chinese communist regime’s National Bureau of Statistics for the month of May have revealed that China’s industrial growth rate has slowed, and that investments in infrastructure, manufacturing, and real estate fell across the board from January to May.

The authorities have tried to portray positive prospects for the economy with the new numbers and attributed it to the success of its central planning.

However, economists have pointed out the data show that China’s economy, with heavy state intervention, is exhibiting the traits of a “zombie economy.”

Following the report, a spokesperson for the National Bureau of Statistics said on June 17 at a press conference that as a whole, the Chinese economy has “continued to recover and improve,” which is due to the Chinese Communist Party (CCP)’s supportive policies, the allocation of investment from the central government’s budget, and the accelerated issuance of special bonds.

Wang Guo-chen, an assistant researcher at the Chung-Hua Institution for Economic Research in Taiwan, told The Epoch Times that currently, China’s economy is a “zombie economy” that only moves when it’s pushed by the state power.

“When the government’s power presses down, then the zombie economy jumps a bit. But when government intervention is gone, it stops moving.”

He explained that “zombie economy” is an economic term that usually refers to a situation where unprofitable or near bankrupt businesses or economic sectors are able to maintain operations because of government support, low-interest rates, and/or continuous loans.

“As soon as the CCP’s government’s funds don’t pour in, investment will fall, and industrial added value will also fall, and PMI [Purchasing Managers’ Index] will fall as well,” Mr. Wang said.

PMI is an indicator of the prevailing direction of economic trends in the manufacturing and service sectors. A reading lower than 50 indicates economic contraction.

China PMI currently stands at 49.50, down from 50.40 last month and up from 48.80 one year ago.

Official Data

According to the new data, the growth in three major areas of China’s economy has slowed down. National real estate development investment fell by 10.1 percent year-on-year in May and decreased 0.3 percentage points from the previous four months. Meanwhile, infrastructure investment had a decrease of 0.3 percentage points from the previous four months but increased by 5.7 percent year-on-year, and manufacturing investment saw a decrease of 0.1 percentage points from the previous fo…

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