Bloomberg: China’s Regular Covid Testing to Cost 1.8% of GDP, Nomura Says (Archive link)
Reuters: China Q3 GDP growth tops forecasts but meaningful rebound elusive
Helped by a raft of government measures, the world's second-biggest economy expanded 3.9% in July-September from a year earlier, official data showed on Monday, outstripping the 3.4% pace forecast in a Reuters poll and faster than the 0.4% growth in the second quarter.
Consider a couple of possibilities.
Chinese aggregate data such as GDP is not terribly accurate.
China runs its economy like a Keynesian machine where it goalseeks GDP via spending projects
If Nomura’s estimate is accurate, covid-19 testing was 50 percent of GDP growth in the prior quarter
My speculation: the zero-covid policy is masking economic turmoil. The government is creating a reason for economic growth that doesn’t trigger herd movement out of stocks, real estate and the currency. Strict capital controls have been in place for 5 years. A trade war with the U.S. is ongoing. The government is managing the trade surplus to maximize currency inflows. Exports are free to climb, i.e. those factories are running despite zero-covid, but the domestic consumer economy is crushed to keep imports down. Even without a cynical interpretation of policy design, it hints at general economic weakness.
Takeaway: the idea that China is going to boom when lockdowns end, if they ever end, appear unwarranted until data finally show something positive.
Did you also note that their population has been calculated at 200m more than they actually have (due to province governors inflating numbers b/c of incentives)? Or was that someone else?