The New York Times put out a blistering article that challenges the economic reports from China. This is something that we have been wondering about for a while now. The article discussed the reasoning for local officials to boost/fudge certain economic readings and that the true slowdown in China may be much worse than indicated.
The author focused on the electricity usage statistics that have been a good metric to read the output and overall economic condition for the country. As city officials may benefit financially from showing healthy usage, keeping two sets of books is common – so the article claims.
This will be a topic of much interest over the coming months as the world has looked to China as the leader (ex-US) for global growth. Now that their official reports are being questioned, there is renewed uncertainty.
Of course the reliability of the data has been something that we have questioned for a long time.
Below is our economic series that we track for China. Clearly there has been a slowing, although there are some areas that are still holding. At least from what the “official” data shows. It is interesting to note that the HSBC Flash PMI, a private report not published by an official agency of China show a marked slowdown that is in contrast to the official reports.
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