China growth probably half reported rate or less, say sceptics

Discussion in 'China' started by Rowdy, Aug 6, 2015.

  1. Rowdy

    Rowdy Co ja kurwa czytam! Senior Member

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    LONDON, Aug 6 (Reuters) - China's economy is growing only half as fast as official data shows, or maybe even slower, according to foreign investors and analysts who increasingly challenge how the world's second largest economy can be measured so swiftly and precisely.

    Beijing's official statisticians reported last month that China's economy grew by a steady 7.0 percent in the first two quarters of the year, spot on its official 2015 target.

    That statistical stability comes at a time when prices of global commodities, which China still hungers for despite a campaign to rebalance the economy away from investment and manufacturing toward consumer spending, have cratered.

    But perhaps the biggest question is how a developing country of 1.4 billion people can publish its quarterly gross domestic product (GDP) statistics weeks before first drafts from developed economies like the United States, the euro zone or Britain, and then barely revise them later.


    "We think the numbers are fantasy," said Erik Britton of Fathom Consulting, a London-based independent research firm and one of the more vocal critics of official Chinese data. "There is no way those numbers are even close to the truth."

    The uncanny official calm in China GDP data may well be contributing to sceptics' exit from Chinese assets just as the authorities struggle to manage a volatile stock market.

    Fathom, which decided last year to stop publishing forecasts of the official GDP release and instead publish what it thinks is really happening, reckons growth will be 2.8 percent this year, slowing to just 1.0 percent next year.

    One issue is that so many other forecasters stick to the script. In the latest Reuters poll of mainly sell-side bank economists, based both inside and outside China, the range of opinion is 6.5-7.2 percent. For next year, it's 6.3-7.5 percent.

    "MAN MADE"

    Li Keqiang, now Chinese Premier, was cited in leaked U.S. diplomatic cables years ago from when he was Communist Party head in Liaoning province calling GDP figures "man-made" and unreliable. This remains a buttress for widespread scepticism.

    Fathom publishes a simple indicator based on three variables that Li said at the time he watched for a better view of how his local economy, and by extension the national one, was faring: electricity consumption, rail cargo volume, and bank lending.

    That implies a growth rate of 3.2 percent, and shows a significant decoupling from the official rate since late 2013 based on a plunge in rail freight volumes and below-trend growth in electricity production.


    "Clearly nobody believes the data," said Sushil Wadhwani, a former Bank of England Monetary Policy Committee member and founder of Wadhwani Asset Management LLP.

    Wadhwani says he also looks at various proxies of China's growth rate, which he deems are "pretty unreliable" as well and which suggest anywhere from 1.5 percent to about 5 percent growth.

    "I truly don't know where we are in that range", he said.

    China's National Bureau of Statistics did not respond to requests for comment on the accuracy and speed of its GDP data.

    At its quarterly press briefing last month it defended the veracity of the data, saying critics did not fully understand accounting methods that China uses, and that authorities were continuously refining the accuracy of the figures.

    GETTING AWAY WITH IT?

    Steady growth since the first of four interest rate cuts by the People's Bank of China late last year implies those measures have been perfectly successful in preventing a further downturn.

    And yet China's housing market has been slowing for most of this year thanks to a vast overhang of debt-fueled construction since the financial crisis.


    Set against the damage from the housing market rout in the world's largest economy, with less than a quarter of China's population - the U.S. Federal Reserve is only now getting close to its first rate hike, seven years after Lehman Brothers collapsed - steady growth becomes even more difficult to accept.

    The speed at which China publishes its GDP data, sometimes within two weeks of a quarter-end, remains a mystery. The equivalent data for Hong Kong can take six weeks to come out.

    Second quarter U.S. GDP data were published two weeks after China's, the first of three regular estimates for any same period, and this time came alongside significant downward revisions to U.S. economic growth in previous years.

    "For a long time, investors and multinationals have not held the Chinese government accountable for having better data," said Leland Miller, president of China Beige Book International, a New York-based firm providing anecdotal survey information about China based on the Fed's "Beige Book" model.

    "These people have said 'it's good enough.' So the Chinese have been able to get away with it."

    Not everyone buys into the debate over how much China's economic growth data may overstate reality.

    "Our view on that assertion is that they are the figures we have, the only figures we have, and they will have to do until someone comes up with better ones," said Carl Weinberg, chief economist at High Frequency Economics.
    http://www.reuters.com/article/2015/08/06/china-economy-data-idUSL3N10F3WR20150806
    @blueblood You believe these figures right?
     
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  3. Srinivas_K

    Srinivas_K Senior Member Senior Member

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    China's GDP is a heavily manipulated numbers !
     
  4. saipaimai

    saipaimai New Member

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    Now even the Chinese also do not believe, the Chinese GDP figures is a joke:rofl:
     
  5. badguy2000

    badguy2000 Respected Member Senior Member

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    yes,although CHinese afford 10 times more autos,steel, concretes,electricity...etc than Indians...
     
  6. no smoking

    no smoking Senior Member Senior Member

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    God, Chinese must manipulate every number they produce!
     
  7. indiatester

    indiatester Regular Member

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    Regardless... their growth is very impressive. I'd rather believe in what I see rather than the nay sayers.
     
  8. Srinivas_K

    Srinivas_K Senior Member Senior Member

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    That comparision has nothing to do with GDP numbers China is manipulating.
     
  9. CrYsIs

    CrYsIs Regular Member

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    Even if the Chinese were faking their GDP growth numbers by big margin,it does not matter much now as the primary purpose of high economic growth is to uplift people to reasonable standards of living.China has succeed in that,so much so that today it's ranked high on human development index and would perhaps become a developed country in another 15-20 years.
     
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  10. badguy2000

    badguy2000 Respected Member Senior Member

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    guy, consumption is one big part of GDP.

    1.Consumption is how many products&service you people buy......
    the more the total consumption is , the mighty one country is .
    the more the capita consumption is , the higher the life standard is .

    2.Last year ,CHinese buy by far more manufacturing/mining/farming/construction products than anyone else(including Yankees).
    Chinese bought almost 10 times more all such products than Indians.

    3. fact is there that Chinese real life standard is much higher than its per capita GDP/PPP shows...



    4.just as I posted in other threads, CCP has no motive to cook GDP,because it has kept fundging GDP and kept a low profile onthe screen of USA for decades....

    CCP's moto: keep a low profice and hide claws,before the proper chance arrives.
     
  11. bose

    bose Senior Member Senior Member

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    That 10 times figure is also fake...
     
  12. badguy2000

    badguy2000 Respected Member Senior Member

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    So, china's huge import of raw resurce/transnational tycoons' huge sale in CHina are also fake?

    Those raw resource exporters are all cooperating with China to cook the data of world raw resource,such as australia(iron ore),brazil(iron ore),Opec states/russia(oil),india(iron ore)???

    those transnational tycoons are also cooperating with CHina to cook their sale data in CHina,such as Toyota(auto) ,Sangsumg(IT),Apple(IT)..etc?


    what a amazing idea you have!
    maybe in your eyes, the whole world are cooperating with China to cook economy data.....
     
  13. badguy2000

    badguy2000 Respected Member Senior Member

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    Guys,

    1.what is "real wealth"???
    "real wealth" is not printed notes like US dolalrs or some paticual metals like GOld.
    "real wealth" is those manufacturing/farming/mining/constructiong goods that can help raising people life starndard.

    2.the more manufacturing/farming/mining/contructiong goods one country/man can prouduce, the more its capability to create "real wealth" is .

    China is the country who create most "real wealth" today; USA was the one during 20th century; UK was the one during 19th century.

    3. It is not always the one who created most "real wealth" that can enjoy their created "real wealth" and is the richest Country.

    early after one country rises to the largest "real wealth" creator, it is usually weaker militarily and politically than the old hegemony-leaders ,thus it has to accept the case that its "real wealth" such as industry products are imposed on a low price and traded by the big daddy's overpriced service-sectors such as lawsuits/banking service.

    That is what happened to British VS USA (Before WWII) and CHina VS USA(today).



    4. Today,with its seigniorage(USD) and hegemony, USA can hawk its overpriced poor-quality service sectors such as lawsuit/mecial service/poinous bonds, then imported "real wealth" such as finished manufacturing/farming/mining products at a supressed low price.
    that is how USA yankees can have a much higher life standard than their job deserve.
    that is also why USA's GDP is 17 trillon USD without overpriced lawsuit/medical/poinous bonds while CHina's GDP is only 11 trillion USD with a by far larger manufacturing/mining/farming/contruction industry.
     
    Last edited: Aug 7, 2015
  14. Srinivas_K

    Srinivas_K Senior Member Senior Member

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    I am not saying you consume less, I am saying Chinese GDP is manipulated. Comparison with India is not needed here.

     
  15. badguy2000

    badguy2000 Respected Member Senior Member

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    Is it a more serious "manipulated" that USA includes soo many "unhelpful"(sometimes even "poisonous") service sectors as possiblevas it can,just to make its GDP look nicer,such as overpriced lawsuit/medical care and wall street bonds?
     
  16. Srinivas_K

    Srinivas_K Senior Member Senior Member

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    But the manipulation in China is 100's Billions.

    http://www.businessinsider.com.au/theres-a-dead-giveaway-that-chinas-growth-numbers-are-fake-2015-7

    http://seekingalpha.com/article/2777615-chinas-slow-down-is-overplayed-with-300-billion-added-to-gdp
     
  17. badguy2000

    badguy2000 Respected Member Senior Member

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    Srinivas_K likes this.
  18. Rowdy

    Rowdy Co ja kurwa czytam! Senior Member

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    Bro I agree..... most US numbers are bull$hit..... but USA also has real stuff like patents and tech (F22 is still No. 1) so lets leave US out of this.
    Now talking about China everyone knows that Chinese people enjoy a good quality of life. The growth rate manipulation is rumored to be in the GDP deflator. The deflator takes into account the effect of inflation on growth rate. It is said that chinese officials underestimate the deflator and hence during periods of high growth,the actual figures are higher(as inflation is not captured) and during low growth the actual figures are lower (like now a days).
    Thats is why the chinese electricity consumption growth rate has hit a decade low of 1.3% and container traffic is also at an all time low.
     
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  19. badguy2000

    badguy2000 Respected Member Senior Member

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    well, deflator might be one of reasons...


    but main reason might be the abupt transition from Maxism_communism statistics to West statistics..

    before 1980s, CHina adopted "gross output value of industry and agriculture "to measure its economy scale and growth,according to MAx-communism statistics;
    After 1980s, CHina converted to west stantistic and adopt "GDP" to measure those.
    such abrupt convertion causes many statisics problems...

    1. many service sectors is missing in CHina's "GDP".

    Maxism_communism statistics insist that "wealth" comes from industry(manufacturing/mining/construction) and agriculture, and service sector can not create wealth and just is catalyst/lubricant of industry and agriculture. China now adopted communism ideloy,but still succeeds many statistic hertage.

    thus, CHina GDP still excludes many service sectors ,which is widely included into GDP in other countries, such as "virtual rent".

    2. absurdly low ratio of Service/GDP.

    Usually speaking, the lower the ratio of Service/GDP is , the poorer one country is ...
    However , China's ratio of Service/GDP is even lower than that of most countries in Black Africa and South Asia....
    But obvoulsy, CHinese have a much higher life standard than people in thouse area ,and CHina has a much more advanced industry base than those countries...
     
    Last edited: Aug 7, 2015
  20. jouni

    jouni Senior Member Senior Member

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    LOL...Is China the Greece of Asia? I am dissapointed, China was one of my favorite countries...
     
  21. Sakal Gharelu Ustad

    Sakal Gharelu Ustad Detests Jholawalas Moderator

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    So much BS in one thread- why services are useless and manufacturing is everything!!
     

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