Be careful Gao, they’ll kill you!

I’m just kidding. Only not. If you’re a Chinese influencer of any repute — or really if you’re just a regular citizen irritable at your circumstances — you’d be advised to suppress the urge to criticize Xi Jinping’s policies, particularly in public. If you’re discontented, keep it to yourself. “Bury it deep down in there, and never bring it up again.”

Gao Shanwen’s a somebody. I say that like I know the man, or have some deep insight into his rapport with the Party. I don’t. So, let me rephrase: Gao’s not a nobody. Of that much I’m confident. Specifically, he’s a PhD economist and he served previously in various advisory roles to the Party. He’s a known quantity, and when you’re a known quantity in Xi’s China, it’s a good idea to clear your public remarks with “relevant officials” (as Beijing might put it) if you suspect something you’re about to say could be construed as criticism, constructive or not.

Maybe Gao’s in such good standing with the Standing Committee that he can say what he wants, or maybe what he said this week, while speaking at an investor conference in Shenzhen, wasn’t actually that big of a deal, but an outsider such as myself will be forgiven for wondering if Gao might’ve exercised bad judgment when he described China in 2024 as “full of vibrant old people, lifeless young people and despairing middle-aged people.”

The context was an analysis of provincial-level data, which suggests a counterintuitive relationship between age and consumption in post-pandemic China. Specifically, the spending impulse tends to be weaker in “younger” regions, consistent with the preponderance of “lifeless” youths and depressed forty- and fiftysomethings. Bloomberg first reported Gao’s remarks on Tuesday.

As a reminder, Xi instructed his statistics bureau to stop reporting the youth jobless rate in China once it climbed high enough in 2023 to be a source of embarrassment to the big man.

I’m going to recycle some gallows humor from a September article because it gives me the chuckles: I wasn’t there last year when Xi demanded a “fix,” but my guess is that when the jobless rate for young Chinese breached 20%, he called up the National Bureau of Statistics and said something not entirely different from, “Get this lower or I’ll kill you.”

About six months later, the NBS rolled out an “improved” version of the youth unemployment metric, only to see it rise sharply too. As the figure above shows, even the goal-seeked rate nearly breached 20% in August before receding in September and October.

Beginning in late September, the Party evidenced something like a sense of urgency, embarking on what, initially anyway, looked like an all-hands stimulus push. But the euphoria quickly faded. Hot money which poured into Chinese equities in early October hit the exits (as hot money’s wont to do) and although PBoC boss Pan Gongsheng’s doing his part, there are still far more questions than answers on the fiscal side, and little in the way of evidence to suggest Xi favors the kind of aggressive, demand-side stimulus many believe’s necessary to revive the consumption impulse.

Month after tedious month, credit data, retail sales figures and consumer prices uniformly suggest domestic demand’s “resting” on lively days, and Norwegian Blue on all the others. Retail sales growth picked up a bit in October but from very weak levels, there’s almost no demand for household credit and core inflation’s hugging the flatline.

It doesn’t help that policymaking’s a black box. There was no Politburo readout for November, and although the Central Economic Work Conference — where the Party draws up a plan for the upcoming year — will start soon, the proceedings will be shrouded in the usual secrecy, the readout will be a recitation of familiar talking points and investors will have to wait four months for the actual growth and fiscal targets.

Coming full circle to Gao, he warned that China’s young adults have lost confidence in the future and as such, their spending “has been curbed” as has “their willingness to buy homes.” “Garbage time” indeed. He also suggested the NBS might’ve overstated GDP by 10ppt during the past three years, a contention Bloomberg dryly (and aptly) described as “bold.”

When I clicked through to what was apparently a WeChat recap of Gao’s remarks, the page informed me that the content “cannot be viewed due to a violation.” Chinese officials, the message said, “received relevant complaints.”