HONG KONG (Reuters Breakingviews) - Another day, another credible Chinese economic indicator goes dark. Two independent indexes of red-hot property prices have quietly ceased publication recently. The country is growing more opaque both literally and figuratively, as smog intensifies and data blurs. Economists have been ordered to stay positive.
The property self-censorship appears voluntary, although Beijing never makes such orders public. But these are just the latest in a series of private measurements - including manufacturing activity and air quality - to have been deactivated.
However, absent credible information investors will be more inclined, not less, to rely on word of mouth instead of statistics. Past experience shows engrained distrust of official statements makes ordinary Chinese people prone to panicked herd movements in reaction to rumour - which is why China prosecutes so many for loose talk. In the past, unverified chatter has caused stock crashes, bank runs and paranoid hoarding of bottled water, iodised salt and milk powder.
Drawing the blinds over property data is particularly risky. Households and lenders are already on edge, worried the government might have to move more aggressively to contain prices - a thesis supported by the data produced by the now-discontinued 100-city Fang Holdings survey, which shows price rises even more extreme than the dramatic increases captured by official data.
Fears of a firmer crackdown on property could provoke not only a selloff in housing but also - and more dangerously - in the more liquid pool of bonds and wealth-management products invested in property assets.
One of the most common, and most dangerous, self-delusions of authoritarianism is that faked optimism can artificially inseminate genuine confidence. Until recently Beijing did a fair job of convincing the population that things were on the right track, but that was largely because they actually were improving. The economy was growing fast; institutional reforms were being implemented; society was getting freer.
Now that fundamentals are wobbling, reforms are being reversed, and dissenting voices are being silenced, officials appear to have reached the unfortunate confusion that its citizenry can be easily fooled. Yet Chinese capital continues to seek ways out of the country, because the more Beijing turns down the lights, the more people suspect it is hiding something.
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