Chinese Electricity Conclusions Reexamined

EconMatters's picture

By EconMatters

China`s 4th Quarter

China`s economy grew 7.9% for the fourth quarter of 2012,
signaling to some that China might be rebounding from a two-year downtrend in
economic growth. When it comes to Chinese data though, transparency issues
always rear their ugly head. 

As a result, many analysts look to Electricity usage to
confirm the economic numbers. Many times the electricity numbers are at odds
with the stronger economic numbers coming out of China, and analysts believe that
during this downturn, the actual growth numbers were much lower than those
published officially.

They pointed to lower electricity numbers that have dropped
off substantially more than the economic drop-off on a percentage basis. The conclusion
is that China is inflating the real growth numbers to paint a more flattering
picture of their economy.

Is this the right Conclusion?

When the latest economic numbers came out, analysts compared these
numbers with the electricity numbers, and they came to the conclusion that the
electricity numbers confirmed an uptick in economic growth in China. So their
conclusion is that the Chinese GDP numbers are correct.

Productive Growth vs. Artificial

I have my doubts regarding the Chinese growth numbers. But I
even have a bigger gripe with what I call productive growth. As in, not
building ghost cities for the sake of artificially pushing up economic
activity, if the finished assets are artificial, and will provide no productive
long-tern use to society.

For example, there are no ghost businesses in Silicon Valley
that are not trying to push the innovative envelope forward with greater
technology advancement which spurs legitimate economic growth for our society.
But this is another argument for another time.

Record Cold Spell in China

My focus is the takeaway from the Chinese electricity usage,
and the conclusions drawn from said usage. I don`t think we can draw the same conclusion
from the electricity numbers as analysts have done in the past for the
following reasons.

It was unusually cold for the fourth quarter in China, one
of the coldest on record according to meteorologists. Not just unusually cold,
but record breaking cold. The kind of cold that people cannot plan for ahead of

I would expect that much more energy had to be used, and that
much more electricity would be required just to keep regular business
operations going, and keep the Chinese people from freezing to death.

Yes, it was that freaking cold in China! The numbers made me
want to move to San Diego, and I live in a pretty mild climate during the

Coal, Heating Oil, Electricity should
all Surge in 4th Quarter

I think given the numbers, that electricity usage should
have set records just to account for the record breaking cold spell that made
up a significant portion of the fourth quarter.

In fact, I attribute much of the increased smog to the extra
running of coal fired power plants to help buffer the effects of these long
cold fronts in China.

Therefore, any uptick in coal, electricity, heating oil in
China needs to be taken in the context of one of the coldest spells on record
in that country, and we should not draw the conclusion that these commodities
increase in usage is a sign of an uptick in economic growth for the country.

Too soon to tell if China has truly

China may very well be improving, but I would expect better
growth numbers from the fourth quarter anyway, even if their economy is still
trending down.  I think it is too soon to
tell if China has actually bottomed from their two-year downturn in economic

We will have to wait and see how 2013 plays out.  But given the extreme cold period of the last
quarter, I think looking for electricity usage to confirm Chinese GDP data is
problematic this time around. Things aren`t always as they appear.

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steveo77's picture
I made this chart, yes the Nuke Pro made it. Several other blogs have copied it nearly verbatim, and I am happy that others want to spread actionable information to protect people (would have been nice to get a proper credit though). I had the chart translated to Japanese as i was sending a Geiger to Japan to help families address their real risk. See bottom for the Japanese version.

This is a super condensed table on how to interpret Geiger Readings. Use it to supplement your own research and getting a "block of knowledge".

If you take this radiation stuff at all seriously, then get a Geiger. All the rest is guesswork.

silverdragon's picture

Dear Tylers,

Great site, there is none better!

However, the retards you have writing ref China is farcial.

Just sayin, please don't shoot the messenger.

Leraconteur's picture

This is why the West loses to China. Cluelessness.

The Chinese do not turn up the heat if it gets colder. They just toss another 4 blankets onto the kang and burn wood or coal cylinders in a small stove and huddle around. All wear very thick, plush, thermal underwear. Houses, offices, hallways, buildings - just about every buidling you see in a photo from China, except the most modern of skyscrapers - they are all unheated or only heated to 47 to 50 F, 8-10C. Maybe 15 C but that is very warm and not usual.

They would rather save money, buy a computer, watch soap operas all day, own a car, than turn on the heat. Really.

JOYFUL's picture

Judging from the speedy downticks to your informative missive, the Femaville inhabitants do not like to be informed of conditions outside the HOLIDAYCAMP\ABATOIRFACILITY

Pity. The Chinese will be ferocious competitors, for resources, finished products, intellectual primacy...and very much because they have studied and understand the western mind, and can operate to their advantage through having done so.

One might think it wise to adopt the same approach, in order to increase the odds of being able to compete with them, but a surly insularity seems to be the order of the day back in Disneyworld.

silverdragon's picture

Who wrote this article, a twelve year old child?



silverdragon's picture

People should be banned from writing about China unless they are here on the ground. It is so painful reading people write nonesense about China from a laptop in US/UK etc.

Really, why do people do it?

Blows my f*ckin mind!

JOYFUL's picture

Preach it!

The bizarre notion that one can get a good perspective on China and the Chinese by looking through a western lense has lead to all sorts of laughable analysis...a virtual army of Aanonymous' in reverse...

Taking a trip to any mid-sized Chinese city these days reveals one salient fact, which trumps all manner of statistical, forensic, or economic 'analysis'...disposable income...the Chinese have it, they're spending it, and the quality of the products available to that huge domestic market is increasing rapidly.

The public spaces, by the way, are immaculately clean and groomed...and young and old are out enjoying them daily, flying kites, dancing, doing tai chi, you name it. No maximum-security oldage asylums there!  One gets the sense that the Chinese Dragon is just beginning to stir from it's slumber...

Never seem so many tricked out Hummers, Jeeps, and foreign luxury cars in my life...and wall to wall blocks of upscale clothing stores...I'm not talking top tier cities, either, the equivalence would be towns like Minneapolis, or Seattle in USA terms...contrast this with street level examination of the rapidly declining retail and social spaces of the Merikan landscape, and you can see where this is heading.

But hey, let's be positive...there's still Hollywood, and the Golden Globe Awards, right?

bigkahuna's picture

Well shoooot,

Lets take our happy arses over there then! Actually, lets send all of our command and control statists over there to set things right. Too much free market-can't have that - send 'em over!

Joe moneybags's picture

Missing at the end of the article:  This blog was sent from my I-phone, upon which it was typed as a text message.  No editing of any kind was attempted prior to sending.

steveo77's picture

 Radiation Spread in the Pacific, a good model
This model does self admit that they are completely ignoring the effects of bio accumulation, which would make things much worse.    Looks like Hawaii is already seeing the ocean impact.

The red zone is 1/1000 times less than the original dispersion in Japan.    That doesn't sound all that great considering they just caught a fish with 2,500,000 Bq per kG at the Fukushima harbor.    Anything above 100 Bq/kG is extremely bad.

q99x2's picture

The Chinese don't get more heat when it is cold they just have to work harder to stay warm.

Moral of the story:

Governments are your enemies and the reason is: they have been taken over by corporations and corporations do not and cannot be moral.

This means that unless we break the system or the system breaks from its own corruption we are doomed.

Tango in the Blight's picture

Too much people, to little oil. This problem will probably self-correct itself soon enough.

100 years ago there were 1.5 billion people living on this rock, 50 years from now there will be 1/3rd of that. just what the elitists want.

Bollixed's picture

Oh, so now I'm an elitist, uh?

ptolemy_newit's picture


China`s 4th Quarter

As a result, many analysts look to Electricity usage to:
                Major SOE are off the grid (aluminum makers)

Productive Growth vs. Artificial Growth

As in, not building ghost cities

                It takes 5 to 10 years to build/move/house 30 million people stupid!  This is proper urban               planning!

Record Cold Spell in China

                The North above the Shanghai latitude always had free hot water heat for years, heat on            windows open!  And most Chinese wear thermal undies.

Yes, it was that freaking cold in China

                I am at 23 lat North and it is the mildest winter I have seen in 8 years (guangxi).

Too soon to tell if China has truly bottomed

China may very well be improving,

                NO it isn’t, take a drive and look at the finished goods inventory!  A lot more than the seasonal                 average numbers for the Chinese spring.

walküre's picture

Trying to make sense of your analysis. Are you saying China is going to shits or are you saying that China's miracle economy is growing leaps and bounds again and we should take all their economic numbers at face value?

FWIW, the Chinese are master at manipulating opinion and data. So many frauds, so little time. At what point do we conclude that the only successful business model in China is that of a fraudulent one?

All fraud and corruption, all the time. But the US is not much better given the current context. They're all lying as soon as they open their mouth.

Tango in the Blight's picture

Not enough oil = not enough food = big die-off. The cold hard facts which humanity faces.

You can ignore them but they won't go away.


Poor Grogman's picture

Have you considered that many of those unemployed and starving people might find work replacing some of the fossil fuels currently used in agriculture?

Just saying, it's yet another angle to consider...

Are we on the cusp of a new agrarian age?

Stuck on Zero's picture

Does that mean I should start carrying an "Organic Fuel" donor card next to my organ donor card?


CheapBastard's picture

Ghost Parks of China:


"According to Reuters, it’s a sign of a decaying property bubble in China."

Tango in the Blight's picture

Do most of these unemployed people have any useful non-industrial farming skills? Or any farming skills at all? Besides there are too many mouths to feed for traditional horse-and-plow farming methods which utilized at most 2 Horse Power as opposed to 400 HP diesel-powered combine harvesters.

Poor Grogman's picture

Can they use a hoe?

Seriously though if distillate gets too expensive additional labour would be very useful.

Start handling in smaller lots rather than mechanized bulk, yes production and efficiency would be lower no question but how else woould the work get done?

Much of the mechanization in farming has been to try and reduce costs created by the increasing cost of labour anyhow.

Just food for thought...

Leraconteur's picture

Almost everyone in China has farming skills.