This page has been archived and commenting is disabled.
Analysts Give Up On "Man-Made" China Data: It's "A Fantasy" That "No One Believes"
When China reported that its economy grew 7% in Q2 - spot-on Beijing’s target - virtually no one believed it.
The veracity of the country’s economic data has long been the subject of debate and when FT called out the country’s National Bureau of Statistics for employing what we called "deficient deflator math" on the way to understating inflation and overstating output, China’s statistics bureau responded, saying that although there was "room for improvement," the deflator wasn’t underestimated, GDP growth wasn’t overstated, and "both reflect the real situation."
One could certainly be forgiven for insisting that the NBS is simply lying, because after all, the "real situation" looks like this:
Charts: A. Gary Shilling's Insight
Given the above, it should come as no surprise that some analysts believe the actual rate of growth in China is closer to zero than it is to 7%. Here’s 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.
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.
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.
Neither do we, but we suspect it's closer to the low end and indeed, if the 35% rise in NPLs cited last week by Shang Fulin, chairman of China Banking Regulatory Commission, is any indication, things are getting a lot worse under the hood as the slumping economy causes loans to the manufacturing sector to sour at an unprecedented rate.
»
- 21560 reads
- Printer-friendly version
- Send to friend
- advertisements -
& you believe obola's departments? lmao
All the data goes into the "China-Grinda". What you get at the other end is like a sausage mixture... No one knows for sure.
Ow Num Bah Li
Plus 1 for the handle
We do however, completely believe their gold holding numbers.
They would never lie about that to keep the price of gold down so they could buy more on the cheap with the USD paper they are selling.
The gold holdings are definitely fabricated...but that isn't how they are manipulating the gold price...their domestic gold production numbers are also fabricated...and no one believes them either. The PBC can have all the gold they want buying from their own producers. Made in China.
I'm not arguing with you. But why do you think they are lying about their gold holdings then? If they aren't trying to keep the price of gold down to buy on the cheap, why not reveal their actual numbers so that the Yuan gets more clout when they apply for various global banking initatives. Like trying to get the Yuan in the SDR as one of the currencies.
The CB holdings may well be 1658 tons. We have good data that suggest a LOT more gold went to China however.
There are many retail gold stores in China...been there...bought there...it is possible the CB holds what it says and private parties and other state entities hold the balance.
CB gold holdings serve a purpose. It is not necessary to hold lots of gold to manage a currency in todays monetary system. It may become more important but it simply is not today.
China and India continue to 'consume' most of the mining supply.
The POG is set in the derivatives market so the flow is almost irrelevant in determining the POG.
The fun will come as the mining out put cannot satisfy real demand from those whose demands must be filled.
Frankly, if they're lying about their gold holdings, then what does it matter?
Today, it's 1600 tons, tomorrow its 20000 tons... no difference except some words of a proven liars and stat-fudger.
Only an international audit could really settle things. That wonb't happen.
Let China claim whatever whenever. The cost of never telling the truth is that the truth is never believed.
China wants the price of gold high, not low. They want to both stash it in their CB and export it too. Maybe they will reveal their "real" numbers when it suits them...in 300 years...unlikely to happen in our lifetimes.
Whatever China's reported growth rate, reduce it by 7-10% to get the real number.
But they believe the data from the U.S.?
Physician, heal theyself
China needs to hire GS and some FED vets to show them how to properly cook numbers......
China's fake economic data is no better than the "Rolex" I bought in Shanghai.
Only wannabes buy a fake rolex.
And you can say this about the official US data too.
But US data is algo goal-seeked and is therefore just great
How is "Made Up" Chinese data different than "Made Up" US data?
Old Yeller says it is better. And it comes with a full guarantee from the Nobel Prize Winner.
'Analysts' know that if they call out US data as BS, they may decide shortly therafter to jump off of a building or shoot themselves in the head with a nail gun - so, there's that.
Its a darker black.
It's cheaper but breaks sooner.
The US media is very critical when it comes to Chinese data - but it would almost never challenge even the most ridiculous claim from the US, e.g. that the US heads towards full occupation.
It's an old European saying,"When things get really,really bad, you have to lie."
It's the eyes...
The BLS has been pushing fantasy data for years, I know we are the exception..
Please, Mr. "Bill of Rights"! To imply that the Bureau of Labor Statistics (a Government Bureau, by the way not just any "bureau") would fudge on the numbers or occasionally drop a grain or two of sand on the scales to tip the balance, borders on treason. Only an individual such as yourself (hiding behind a Patriotic Screen Name) who obviously DOESN"T LOVE AMERICA would insinuate that Official US Government Statistics are anything less than 100% accurate and above reproach, rigorous and thoroughly vetted through a robust and impartial process!
Now, perhaps, once in a while, a Bad Apple at BLS might, er, draw the line between Fact and Fantasy, Reality and Desire, in, perhaps, a different place than you or I might but....
We ALL must have Faith and Confidence In The System.
America! Jesus' Favorite Country! ©
Funny .... Herbalife up 7% despite a sales dump of 11%.... and a lot of bullshit about their success scamming moar poor Chinese suckers.
http://www.bloomberg.com/news/articles/2015-08-05/herbalife-profit-tops-analysts-estimates-as-sales-gain-in-china
Except for the tiny rise in gold holdings reported. That is honest reporting. Everything else, bogus.... seriously.... no, really....
We all know Chinese numbers are and have been full of shit. The real catch is that they are fuller of shit then everyone elses numbers....
Shorter version:
"We have always known the data was made up, we just no longer believe any of it."
A Longer-Shorter CYA version:
"We have always known the data was made up, we now know you the data is so absurd it can only be made up, so we no longer believe any of it"
Maybe their whores are doing a much brisker business? Pussy doesn't use electricity, steel, or rail capacity. They hoes may be buying more shoes and miniskirts, but I don't think that shows up in the "fixed asset" investment numbers.
Just kidding - I am often in Dongguan, and the ho trade there is suffering monstrously.
Details Heywood details, I hope it has not affected the Tai Wan hotel.
Liar's Poker scaled up macro
Don't look at me. I sold all of my IBM shares in the 70s because the data centers I serviced all closed down. Literally acres of computers... Gone.
The next financial report from IBM, monstrous results. Stock doubled.
The Chinese are liars. But, they are very good at building two factories for stupid Americans. One for you and one for them. Then in three years...
It seems that nobody ever got to the bottom of this story;
"Is China faking economic data to appear rosy? Analyst’s opinion is cut in later version."
http://mediaequalizer.com/brian-maloney/2015/07/wsj-caught-self-censorin...
They've been lying so long it's now a tradition.
a hore, calling a hore, a hore
Whore.
Chinese issuing totally incredible lies almost comic in their diassocation from all known reality?
I guess they learned it from watching Mordor on the Potomac.
OMG - it's about time others started to wake the hell up when it comes to China. They lie about everything - can NOT be trusted and will steal your wallet while they're in front of you!
So what your saying is China is doing the same thing the United States is doing and its news ?
Tell me, what is the difference between what the National Bureau of Statistics did in China and what the Federal Reserve did in November 2007 after The National Bureau of Economic Research informed them that a recession had begun.
THE FED WAITED 12 MONTHS BEFORE INFORMING THE AMERICAN PEOPLE -- AND THE PEOPLE OF THE WORLD -- THAT THEY WERE IN A RECESSION.
WHY?
TO LET THE BANKS AND INSTITUTIONS REPOSITION THEMSELVES AS BEST THEY COULD BEFORE THE ANNOUNCEMENT?
OR WAS IT TO HELP THE REPUBLICAN CANDIDATES FROM PRESIDENT TO DOG CATCHER GET A FEW MORE VOTES IN NOVEMBER 2008?
WHATEVER THE REASON, CHINA HAS EVERY RIGHT TO BE AS BIG A CROOK AS THE US GOVERNMENT.
BUT IT STILL HAS A LONG WAY TO GO.
The entire world crossed the "Fantasy Data Rubicon" a long, long (insert as many longs as you like here) time ago.
Long x100.
Most of those Chinese statisticians were educated in the U.S. They learned how to fudge data from the pros!
Probably trained at Goldman Sachs.
How is China's service industry doing? The latest service PMI is something like 53.8% me think. The retail sales also grow more than 10% a year. Electricity comsumption is also growing. China is still the world's largest auto market and trade nation. There is no way China is stagnant at zero growth rate for sure.
Maybe you can help me out here.
The only time I see you is on a China thread, and every time you are waving your pom-poms.
Couild you name some data point in China that you think is really alarming?
Is China's leadership as corrupt as the leadership cadre in every other country?
You mean like Man-Made Wall Street data?
Nobody cares about corruption, when money's being made by all.
The tide is going out.
The really disgusting thing to me is not that an ironfisted Communist dictatorship is manufacturing economic statistics and spewing out happy talk about how great the new Five Year Plan is going. Everyone worldwide knows that this is "die grosse Lugen" on an industrial scale.
It's that we've become them and resort to the same anti-republican methods of keeping the alleged masters of the country in deliberate ignorance of the danger they are in.
We are sinking to the level of phony Communist apparatchiks mindlessly parroting the Party line.
Nothing Bernanke can't fix. Fuck you Bennie
Too busy sitting in his citadel...
what's ahead for China will scare the hell out of the world.
Note to Putin: You might want to beef up everything militarily in eastern Siberia, especially in all that land Stalin & the Czars stole from China, way back when.
My brother has been living in Shanghai for the last few years as a jazz muso. He got to perform with some Movie actress who thought she would like singing.....so they got to tour around China. She is big in China. Karen Mok. He told me they did this gig near Mongolia and he saw these massive cities - with huge buildings, paved roads....everything.......all ready and waiting .........except there is no one in them................
Like the movie 'The Omega Man'......they have built these huge cities already.....false economy anyone?
The Real China Dire Situation In a Couple of Unambiguous Charts.