China is “becoming an information desert,” warned an expert at a congressional hearing last week.

“You can’t invest if you don’t know the basic data and how every sector is performing,” Shehzad Qazi — managing director of analytics firm China Beige Book — told the Select Committee on the Chinese Communist Party (CCP).

The Backstory

China is increasing restrictions on the acquisition and export of economic and financial sector data. It is also targeting foreign companies that conduct due diligence and research in China.

  • Last year, Chinese financial data service Wind Information informed foreign customers they would be barred from accessing some data due to new privacy laws.
  • This spring, Chinese authorities raided the offices of Bain Capital and Mintz Group. The Mintz Group was reportedly conducting due diligence investigations related to supply chains that possibly used the forced labor of Uyghur and other Turkic Muslims from China’s Xinjiang region.
  • According to Rep. Raja Krishnamoorthi, from 2012 to 2016, “the number of public indicators regarding the economy has plummeted” from 80,000 to 20,000 — with an even steeper descent thereafter. He accused the CCP of “trying to hide the reality of the economy.”

An Economy in Trouble

China’s economy is struggling, growing by only 0.8 percent in the first quarter of this year, compared to 2.2 percent during the same period last year.

Consumer spending is also slowing. Retail sales grew by only 3.1 percent in June compared to 12.7 percent in May. Local government spending has been curtailed by the ongoing real estate crisis.


Foreign direct investment (FDI) is also shrinking as a percentage of gross domestic product (GDP).

  • In 2022, net FDI equaled 1 percent of GDP, down from 4 percent in 2010 and 6.2 percent in 1993, according to the World Bank.
  • A Chinese trade official from the city of Chengdu told the Wall Street Journal after returning from Europe: “In my 20 years of trying to get investments from Europe, this was the first time we didn’t get to sign even one memorandum of understanding.”

The Big Picture

Information is power. It empowers decision-makers to make informed choices. It alerts them to opportunities and risks. Good information is coveted by policymakers, spies, and investors — both the ones betting on your success and those betting on your failure.

Yet a free market requires the availability and ubiquity of reliable macroeconomic and financial sector data. By enlarging what Qazi calls the “black box” of data on the Chinese economy, China is only accelerating the decoupling (or derisking) of its economy with the West.

China and the U.S. are exploring a reset of relations, as reflected in the visits of Secretary of State Antony Blinken and Treasury Secretary Janet Yellen. But expect China’s data firewall to harden.

  • Peter Humphrey, a long-time due diligence investigator in China, warns that the country’s new espionage law that went into effect on July 1 could enable Chinese officials to treat “all investigation activity and data gathering” in the country as espionage.

Arif Rafiq is the editor of Globely News. Rafiq has contributed commentary and analysis on global issues for publications such as Foreign Affairs, Foreign Policy, the New Republic, the New York Times, and POLITICO Magazine.

He has appeared on numerous broadcast outlets, including Al Jazeera English, the BBC World Service, CNN International, and National Public Radio.


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