China's Economic Censorship: Sign of a Slowdown, or Something More?

Image By: ABC News

The chinese government’s reaction to its economic crisis

Since the 1980s, China has been an economic powerhouse. Their total GDP growth had been averaging 9.5% through 2018, a pace described by the World Bank as “the fastest sustained expansion by a major economy in history.” Such growth has enabled China, on average, to double its GDP every eight years and helped raise an estimated 800 million people out of poverty. However, in recent years, China’s unsustainable levels of debt – particularly caused by the country’s unsound investments in infrastructure and property development that have historically been core pillars of China's growth – have put China in a compromised economic situation. 

Although the country’s economic situation can be expanded on in great detail, what is particularly fascinating are the ways in which the Chinese government has aimed to subdue the noise surrounding its current poor economic standing. Specifically, China’s Ministry of State Security has applied a series of domestic policy initiatives that have aimed to silence and de-platform anyone who tries to speak poorly about the country’s economic state. Even for China, which is not known as a state that promotes free speech among its populace, this policy is drastic and is masking an underlying issue that becomes evident when observing the economic situation that China finds itself in. 

In June of 2023, three finance commentators with 4.7 million Weibo followers were blocked from the social media platform as punishment for detailing the extent and magnitude to which the unemployment rate was becoming a serious issue for China’s citizens. China viewed these acts as smearing the development of the securities market and contributing to the negative spread of information about it. Moreover, the Weibo account from Weibo Finance issued instructions against posting any comments that would “bad-mouth” China’s economy. Additionally, several online finance influencers were told by Weibo to “avoid crossing red lines” with regards to their comments on China’s economy, advising them to post nothing at all about the economy. Moreover, China’s Ministry of State Security keeps pushing the narrative that there is a significant need to highlight the positives of China’s economy, implicitly policing all negative narratives published by independent and official news sources. A statement issued by the ministry stated that the “various cliches intended to denigrate China’s economy continue to appear… [and] their essence is to use false narratives to construct a discourse and cognitive trap of China’s decline in order to cast doubt on the system and path of socialism with Chinese characteristics.” 

contributing factors to the downturn

Though the signs of a slowing economy are indeed alarming, why would China want to incorporate such a rigid policy? Firstly, for the first time in 25 years, quarterly foreign direct investment inflows to China were negative. Since China entered the World Trade Organization in 2001, there has never been a year where individuals outside of China were not putting money into the state’s economy. A significant factor contributing to this decrease has to do with millionaire net migration in 2022. 10,800 millionaires left China in 2022, and 2023 projections estimated that 13,500 more millionaires migrated from China after that. 

Moreover, China’s silencing policies stem from the country’s  current issues regarding its real estate sector. Real estate makes up 30 percent of the country’s GDP. However, since 2021, 40 percent of China’s home sales were linked to property companies that have defaulted and home sales as a whole have decreased by 29 percent across major cities including Chengdu, Chongqing, and Guangzhou. Such information being released to the public could have catastrophic impacts on the economic state of the country that already finds itself in a compromised position. 

Lastly, with the monthly urban youth unemployment rate for people aged 16 to 24 reaching a peak at 21.3 percent, an evident lack of employment opportunities points to distinct underlying issues with the foundational structure of China’s economy that government officials wish to keep away from its citizens and the rest of the world. 

For China, these negative economic prospects do not look good for the country's future economic standing. The dire attempt by government officials to impose policy to try and silence critiques about the current state of economic affairs points to the fragility with which the Chinese government is working. For China, its image as an international player is key to maintaining an economic and political order in which it can maintain its recently acquired dominant presence in Asia. With the world becoming increasingly hostile and divided, evident in the uptick in wars around the world, it will be particularly interesting to see how China’s geo-political situation unfolds.