The Sum Does Not Equal The Parts: China Provincial GDP Signals Sharper Slowdown

Tyler Durden's picture

First-quarter growth in almost all Chinese provinces was below their annual targets, according to local media, with the most concerning data from resource-dependent and manufacturing-heavy provinces suffered the sharpest economic slowdown in the first quarter as the government pushed to tackle excessive factory capacity and pollution. As Reuters reports, the fastest growth regions are Chongqing, Guizhou and Tianjin and all saw growth drop significantly. Specific provinces affected by the government's reforms include Inner Mongolia, which provides one third of the coal supply in the country, saw GDP growth drop to 7.3% in Q1 from 9.9% a year earlier; Shanxi, a major coal producing province, which saw growth tumble to to only 5.5%; and Hebei province, the nation's top steel producer, collapsed to only 4.2% in the first quarter of 2014 from 8.2% in the previous quarter. It seems the sum of the parts is anything but the same as the whole.


As Reuters reports, China's resource-dependent and manufacturing-heavy provinces suffered the sharpest economic slowdown in the first quarter as the government pushed to tackle excessive factory capacity and pollution, official data showed.

First-quarter growth in almost all Chinese provinces was below their annual targets, according to local media.




Growth in China's less developed western and central provinces have consistently outpaced that of more affluent eastern regions in recent years, but the latest data showed the gap is narrowing as the former saw growth slowing more quickly.

However, it's entirely unclear still what the real numbers are...

The combined economic output of China's provinces has long exceeded that of the national level compiled by the National Bureau of Statistics, raising suspicion that some growth-obsessed local officials have cooked the books.


Analysts at Bank of America/Merrill Lynch estimated that weighted average of provincial real GDP growth rate in the first quarter was 8 percent, down from 9.5 percent in 2013.


Chinese leaders have recently set new standards for local officials, stressing that their performance cannot be simply based on regional growth rates, but should include resource and environmental costs, debt levels and work safety.

So if these are the 'locally' reported data - and they are this bad - just how bad is the growth? And just how bad has it been for years as perhaps this is the normalization to reality that so many China realists have been expecting (and China bulls denying).

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Ness.'s picture

Do they have weather in China?

knukles's picture

Nah.  Just lots a brown fog.
But.... Obie said it was all fixed.


A Balance of Payment consideration.  Sell 'em the BLS

Deathrips's picture

Some things you cannot unsee.


What name was this troll you picture posting under on ZH?


Was it MDB?


I need to know.



aVileRat's picture

Knuck's ? He wrote an explanation a while back, post search (or he can repost the story). Simple Simon

Yeah, those GDP numbers for China are going to really suck balls for some of those gogo OEM developers and their well diversified portfolio of 80 condo's. Would be really nice to see how much Gold was being hoarded by princelings / golden children and how much was being socked away by corporations for collateral to loan sharks when their inventory pledges were marked to zilch. In the twilight years of USSR we saw the same thing where gold and silver were being stashed away to pre-save for the big state auctions. Wonder  how the average Han guy, Auditors and Shareholders (gov) will react when criminal audits reveal automotive & coal mines executives were buying gold to buy dirty-RNB from repo traders instead of implementing their 5/year plans & raising wages in the outer provincials. I'm going to bet with a short stick, that regulator may have been onto something before his heart attack. Which could very well have just been an odd turn of events.




Tipo anónimo's picture

That photo is the soul of the Party.  Horrific.

stacking12321's picture

ah,  cmonnnnn!

you know you'd hit that!

giggler321's picture

I don't think posting a picture of Fonestar is a good idea.

rkbauer's picture

For the most part, yes. But Beijing has two seasons: Smoggy and more smoggy.

Charles Nelson Reilly's picture

Was that a picture of my Senator, Barbara "Babs" Mikulski? That little fat cunt troll swallows teenage lesbo's for breakfast.

Osmium's picture

Fred Sanford aid there ain't nothing uglier than an old white woman.   That picture may prove him wrong.

Four chan's picture

you keep saying this but i still dont get the reason.

what's that smell's picture

no reason needed, grumpy.

he's either racist, racist, racist, or racist.

you decide then shut the fuck up.

Thanatos's picture

Remember that scientist who said that humans were the genetic result of Pigs getting with Monkeys?

IMHO, that pic lends some credence to the theory.


AUD's picture

It's Piggsy's daughter. Though I always thought 'Monkey' was just a TV series.

Colonel Klink's picture

Growth in 'Murika just doesn't seem to stop.  All I see around me is obese people.

disabledvet's picture

The sum of dim sum is always more.

Colonel Klink's picture

I'm finding the greater sum dim.

cheetahbaby's picture

Bro', hit the "eject" button on the State of Maryland.....

Colonel Klink's picture

I'm finding Maryland becoming another liberal shithole much like NJ, NY, IL, and CA.

mrpxsytin's picture

Move to Australia. Western Australia if possible.

Chief Wonder Bread's picture

The Sum Does Not Equal The Parts.

Hmmm, Dim Sum?

El Vaquero's picture

Was that dude in the pic raised by Smithfield Foods?

nmewn's picture

All he needs is an App in his

nmewn's picture

Communists never lie, they'll torture the numbers and make them confess, you'll see ;-)

SmallerGovNow2's picture

U mean like the USSA numbers?

nmewn's picture

They are communists, aren't they? ;-)

Hobo Sapien's picture

More detailed take on this story by PhilStockWorld here:

SmallerGovNow2's picture

If growth DID drop to 5 or 7%... MEH.  But the 5 or 7 is all lies so again MEH...

AdvancingTime's picture

Fast growth tends to mask flaws and weakness within a system, and China has been growing like a weed for years. In recent years many of the investment decisions in China were driven by politics and corruption. This has created massive overcapacity. Money has been poorly allocated and often shoveled into deep holes like ghost cities and bridges to nowhere.

We now see the 6.6 trillion dollar spending spree used as stimulus to combat global economic slowdown after 2008 is coming back to haunt China. This has greatly expanded credit and created huge overcapacity during the past five years. A massive debt crisis now looms as companies are struggling to repay loan taken to build factories that sit idle because of weak demand. More in the article below,

slightlyskeptical's picture

Growth of 4,5,6% is something bad? Every other economy in the world wishes they were growing that fast and their central banks would take action to ensure that growth slowed. Is this article some kind of reverse propaganda or something? What is funny is that the US markets are priced like we have 4-8% growth while China's market is priced more like they have American super slow growth.

Is Tyler Durden actually a computer with bad programming?

Septicus Maximus's picture

That's a Japanese fat girl on the front page, not Chinese, Tyler... 


d edwards's picture

Either way, it's gonna take awhile to get that gross image out of my head!


I think her name is Wee Tu Fat

rkbauer's picture

In all seriousness, China needs to do all they can to sustain growth. Historically, the country's major problem has been social instability, which for now is kept in check.. but only because the Chinese are placated by economic growth. Once that slows down, well.. it already has.

Dr_D's picture

China is clearly headed for a hard landing, with a non-neglectible probability for a systemic crash. And there is not much the authorities can do that will not make that crash worse in the future...

GOSPLAN HERO's picture

Maryland is just another tax hell.

esum's picture

China growth is so bad ITS GDP WILL SURPASS THE USSA THIS YEAR... that's how bad the economy is there...