Xi Jinping’s regime has been censoring economic data for years that attest that the domestic economy is in the doldrums, while maintaining expansion plans with gigantic investments that could catapult China to the first economic power in 20 years.
According to the official accumulated data, the Chinese Gross Domestic Product grew 5.2% year-on-year between January and September. Although the Beijing regime does not publish its growth forecasts, it is expected that in 2026 it will also grow around 5%.
Do you remember that GDP growth does not guarantee the well-being of citizens? China, where the Communist Party exercises imposing state-planned capitalism, is on its way to becoming the epitome of a large GDP with zero illusion.
Although growing above 5% seems like a dream, seen from the West, The Chinese model looks less and less like prosperity shared than to sustained growth through public investment, directed credit and exports, with cautious and disillusioned households where the only hope is to continue saving.
With the real estate crisis, the properties in usufruct of the Chinese (the land belongs to the state) are also being devalued.
In September, China’s state internet regulator, the CAC (Cyberspace Administration of China)announced a two-month campaign against online content that incites “hostility” and “violence” or spreads economic “rumors,” “pessimism” and “negativity.”
This pushes for a strict inspection of trends, comments and politically correct recommendation systems on large platforms, such as Weibo, WeChat, Kuaishou or Xiaohongshu.
Xi’s censorship
Xi’s is not a reactive censorshipbut a preventive architecture to discipline the social climate in advance, aware of the existence of justified economic anxiety, in a context of slowing growth and youth unemployment that began with the self-inflicted crisis of Xi’s Zero Covid policy.
This official censorship affects Also, since April, to sensitive market issues and the trade war with the United Statesas documented by the Reuters agency at the time, with searches and hashtags blocked on Weibo such as “tariffs”, “sanctions”, “prices”, with the aim of intervening in the flow of information and guaranteeing social peace.
According to Freedom House, CAC removed more than one million pieces of content in massive cleanup operations. Censorship, as happens with propaganda in liberal democracies, calms
the spirits until hunger stirs the stomach.
As of December 2025, the data that the self-proclaimed “communist” regime has tried to stifle confirm growth without perceived well-being: industrial production continues to weaken, registering its lowest growth in fifteen months in November, with a 4,8%; Banks keep net interest margins compressed to a record low of 1.42%it is not just that Beijing does not want to stimulate the economy, it is that it cannot do so without further affecting the real estate market, local government debt, consumption, SMEs and social stability.
Weak domestic demand
He youth unemployment -the official figure excludes some 87 million students of working age- it is officially 17%. The scrawny ones retail sales They have barely grown 1.3% year-on-year in November (the lowest figure since 2022). And according to a survey by the PBoC (People’s Bank of China) one in five Chinese citizens report declining income and a deterioration in confidence in employment.
At the same time, the foreign surplus is hugeabove 1 billion dollars in the first 11 months of 2025. If China does not rebalance internal consumption, the surplus has to go abroad.
In this context, the leadership promised at an economic meeting in early December a proactive fiscal policy in 2026 to stimulate consumption and investmentrecognizing the imbalance between strong supply and weak domestic demandand with the possibility of a high deficit and more debt issuance.
The Chinese economy expert Elisabeth Economy has analyzed with surgical precision in Foreign Affairs the plans that Beijing has been announcing in recent years to expand its borders in seabed, in the Arctic, in space, in digital standards and in financeas a power strategy for decades to come, approximately until 2045.
We do not know if Xi Jinping, 72, hopes to remain in power by then, since as veteran Chris Buckley explained in The New York Times, the succession of the dictator Chinese is a taboo subject. But the evidence is that there coexists domestic economy and citizen well-beingweak, with a enormous geostrategic muscle.
According to Economy, the Chinese roadmap for the next 20 years involves becoming a “great polar power”, an objective included in the 2018 White Paper that refers to a “Polar Silk Road”, in reference to the Arctic.
China also hopes to lead underwater mining, with influence on International Seabed Authority (ISA) and dual civil and military technologies. Its objective is also to master cyber standards through telecommunications infrastructure and submarine cables.
And in the area of finance, it hopes to reduce its dependence on the dollar by making greater use of the yuan (reminder) in foreign trade, with alternative payment systems (CHIPS) and agreements with partner countries.
In the midst of all this, the visit of French president Emmanuel Macron (47) Beijing carried an implicit threat this month if Beijing does not act on the trade imbalance with the European Union: tariffs.
The EU goods trade deficit with China went from –164,000 million euros in 2019 to –304.5 billion in 2024; and France’s bilateral trade deficit with China is around –47 billion euros (2024), according to the French Treasury.
Beijing loosens tariffs
As a trade response from Beijing to pressure from Brussels, the Asian giant has drastically reduced the “anti-dumping” tariffs on European pork this last week (between 4.9 and 19.8%) well below the preliminaries announced in September.
This affects Spain, which is the largest European exporter of pork to China, with more than 540,000 tons exported in 2024 worth 1.1 billion euros. Madrid may tilt the tone within the EU by being more receptive to Chinese investment, but it also complicates European unity.
Another proof that the Chinese domestic economy is not doing well is that Beijing is inclined to rely more in fiscal stimulus in 2026according to economists’ reading between the lines of high-level meetings in Beijing and previous political trends.
But even with disputed domestic growth, China is still able to devote resources to strategic infrastructure because he State dominates industrial planning and its
gigantic export sector.
What he Party-State called “socialist economy with Chinese characteristics” is a capitalism planned by the State. Now, the China’s foreign strategy cannot be independent of internal fragility.
It may, in fact, be a response to that weakness. The European reaction to the Chinese surplus is not ideological, but accounting. But as the economist pointed out Joachim Klement The “second shock” of China flooding Western markets with cheap industrial products may be a blessing in disguise: a blow for European industry, but at the same time it can also lower inflation enough –0.15 percentage points– enough for the ECB to lower rates even further and That will push European GDP in 2026.
This second wave due to Chinese overcapacity, due to the drop in demand in the US due to the tariffs imposed by Donald Trump, will tighten margins in European sectors such as automotive, machinery and high technology, and not only in cheap consumer goods.
It may therefore be a disinflationary wave, since the price of goods imported from China fell by an average of 20% in the 12 months to October, and these imports directly influence 23% of the eurozone inflation basket.
A China that cannot get its households to consume as expected needs someone to buy what it produces. And a China that also wants to write global rules in minerals, routes, satellites, cables and payments is not going to reduce its foreign ambition because the street is discouraged.
Quite the contrary, it can use that ambition as a substitute for domestic economic legitimacy.