“China rarely fails to achieve its growth target.”

That’s a direct quote from an analyst note Monday. Take a moment to consider how ridiculous it is.

That assertion suggests it’s possible for seven people (i.e., the CCP’s Standing Committee), none of them accomplished economists, to manage, from the top down, an $18 trillion economy not just around a full-year growth target devised and announced 13 and nine months in advance, respectively, but to that target almost precisely.

The only thing more ridiculous than that is the fact that so many intelligent people not beholden to the Party in Beijing (which is to say people who could, safely, question the veracity of such an obviously absurd proposition), actually seem to believe it.

I’m going to use the same chart I employed a week or so ago because it really does underscore the preposterousness of this.

Bear in mind, you can pretty much exclude 2020 (for obvious reasons), 2021 (because they were comping against 2020) and 2022 (because that was the year of the Shanghai lockdown). Stripping out those three anomalous years, the Party would have you believe that from the time growth started to decelerate meaningfully in 2012, the CCP’s leadership managed that behemoth of an economy around an pre-announced annual target with virtually no error, ever.

This year’s growth target is 5%, and as discussed here earlier this month, it’ll be hard to hit unless the Party does something meaningful to revive consumption, particularly given what’s likely to be pressure on exports from tariffs and trade tensions more generally.

Over the past several months, Beijing’s floated a hodgepodge of ideas for bolstering household sentiment, and officials held a press conference to that effect on Monday where, as usual, nothing new or concrete was announced.

Later, the January-February data rollup showed retail sales rose 4% from the same period a year ago. That was marginally ahead of estimates. Industrial output, by contrast, grew nearly 6%, beating estimates easily.

The decent IP showing likely reflected more global front-running as buyers around the world rushed to beat Donald Trump’s tariffs.

As the figure above shows, retail sales growth hasn’t outstripped industrial output growth since late 2023. That’s a testament to a sort of economic backsliding, as China leans on its factories to make up for lackluster domestic demand.

Note that credit data released last week showed the overall stock of outstanding local loans to the real economy grew just 7.1% in February YoY. That growth rate has declined inexorably since February 2021, when Xi launched his social engineering project (instituted initially under the banner of an anti-monopoly crackdown).

The figure above gives you a sense of where we are, so to speak. Retail sales have recovered, but nowhere near the 5-7% growth rates which were typical leading into the pandemic. The growth rate for the nation’s stock of outstanding yuan credit has halved. And with the caveat that last month’s reading was distorted by the timing of the Lunar New Year holiday, core inflation’s negative.

I don’t care what your local weatherman (read: your favorite Wall Street “Chief China Economist”) says, this situation’s in a bad way, and it’s made immeasurably worse by the impossibility of discerning whether and to what extent the data’s accurate.

It’s not lost on me (in fact, this is the whole damn point), that the figures I’m using to suggest the GDP numbers can’t be trusted emanate from the same statistics bureau which produces the growth tally. And indeed, the NBS has leaned into the deflator to prop up the real growth prints.

As I’ve put it previously, there’s something hilariously ironic about the Party banning talk of deflation (the “D” word) while the NBS relies on it to meet the Party’s growth targets. (Nominal GDP’s below real GDP.)

So, I don’t know. If you ask me, China’s uninvestable any way you look at it. The data’s of questionable quality and even if you trust it, it doesn’t paint a particularly upbeat picture outside of exports, which are about to get hit by the trade war.

The domestic political situation’s nothing short of a tragedy: In just a few years, Xi’s undone decades of glacial progress towards a less severe version of one-party, communist tyranny.

Finally, the geopolitical picture’s hopelessly fraught, and likely to become even more difficult in the medium- to long-term even if Trump and Xi bond over chocolate cake again. Simply put: It seems quite likely that Xi will move on Taiwan at some point during his remaining years.

What a forced reunification might look like and whether or not it’s successful are open questions. (Maybe it’ll be a failure. Maybe it’ll turn out like Trump and the girl who wanted some furniture.)

For what it’s worth, Monday’s data from the NBS also showed the urban jobless rate rose to 5.4% in February, the highest since March of 2023.

On the bright side, and as noted in this week’s macro preview, Chinese equities are outperforming US stocks by a truly hilarious 24ppt so far in 2025.