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Chinese GDP Propaganda Full Frontal: Plunge In Key Data Points Pitched As Bullish
The fact that China habitually overstates its GDP growth is probably the worst kept secret in the world next to Russia’s support for the Ukrainian separatists at Donetsk.
In short, the idea that China’s economy is growing at a 7% clip is so laughable that at this juncture, even the very “serious” people are openly challenging it. To be sure, it’s not entirely clear what part of the fabricated numbers represent willful deception and what part simply derive from an inability to accurately assess the situation. For instance, the deflator tracks producer prices more closely than it probably should, meaning GDP is overstated in times of plunging commodity prices but that might well stem more from a lack of robust statistical systems than it does from a desire to mislead the market.
In any event, getting an accurate read on Chinese economic growth has become something of a contest. It’s almost as if the market thinks that one day, the truth will come out and everyone wants to be able to say “my estimate was the closest.” What’s particularly interesting about the whole thing is that a quick look at the variables that Premier Li Keqiang himself has said are a better proxy for economic growth in the country (electricity usage, rail freight volume, and credit growth) suggest GDP growth in China may actually be running below 4%. SocGen’s Albert Edwards and any number of other analysts have noted this as well.
Of course Beijing has never seen a problem that a good dose of propaganda can’t fix which presumably explains the following bit from the Global Times (a paper owned by the ruling Communist Party’s official newspaper, the People’s Daily) which attempts to portray the weakness in electricity usage and freight volumes as a positive in light of the country’s transition towards an economic model driven by consumption and services:
China's industrial restructuring has helped cut electricity consumption and freight transportation, while the economy has maintained a medium-to-high growth rate in the first six months, said Zhang Xiaoqiang, executive deputy director of China Center for International Economic Exchanges.
Zhang admitted that there were some doubts about China's economic growth rate in the first half (H1), as two key indicators of economic growth, namely power consumption and freight volume, dropped remarkably.
China's GDP expanded 7 percent in the first six months this year from the same period last year, slightly down from 7.4 percent in 2014.
Power consumption, however, only expanded 1.3 percent in the first six months, sharply lower than 5.3 percent posted last year. Freight volume expanded 4.2 percent, down from 7.5 percent last year.
The industrial sector grew at a slower pace in H1, while the service sector has become a major engine for the economic growth, said Zhang, adding that the industrial sector consumes more energy per unit of GDP than the service sector.
In freight transportation, China's coal, steel and cement industries have been subject to restructuring and, thus, their output has dropped, leading to slowdown in growth, he said.
The discrepancy between economic growth and the two key indicators' growth in the first six months did not fit with previous patterns, but industrial restructuring is a new factor, and should be taken into account when analyzing the new situation, he said.
Consider that, along with the following chart, and draw your own conclusions...
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They need to drop these % rates of growth and just start saying the economy, GDP, etc. is growing at "Ludicrous Speed!" …I'd believe that a whole lot sooner than 7%.
Float some more bloated pig carcasses down the rivers!
But be sure not to tell David Cameron. We don't want him swimming with the piggies
but but but the Chinese and the Russians are the good guys, they would never lie to us, only the U.S. government lies........
Tell me, for time immemorial, has human nature ever changed for the honest? No. So you are lucky or unlucky when and where you were born and raised. Cultures, governments, come and go; but it is always the same. The ruthless control by whatever means, the timid take it. And some, like the ZHers complain.
We've been velly rucky here in America but it's about to go downhill fast.
No different then US unemployment or ISIS threat assessment.
The PBoC has officially sequestered the top spot in," Ripley's Believe IT or Not., bullshit shoveling competition.
I guess we'll see in about 45 minutes? http://www.google.com/finance?cid=7521596
I suggest we find a leader maybe in tazmania to lead the populations of the world to revolution against banksters.
Liars figure, figures lie. A very old accounting trick.
"The fact that China habitually overstates its GDP growth is probably the worst kept secret in the world next to Russia’s support for the Ukrainian separatists at Donetsk."
lmao!
Careful now, you'll have multitudes St.Pooty fans calling you a NWO supporter at the least and a jooo kiddie fiddling blood drinker at the worst for pointing out open, state sponsored, media...lies ;-)
The politburo has actually ordered Xinhua to translate all September economic articles into an instrument of propaganda. Nothing new!
Long Medium Growth!
Hate when that happens. Duplicate.
Explain the chart in laymen terms please; looks like to colorful and crooked lines that cross each other...nice.
The lines are divergent.
Fact and Fiction are diverging from eachother. Same as it ever was.
Best insight into economy traditionally offered from gut of fortune cookie
Hey! Who's up for trusting the Chi-Coms keeping "the global books"?
They seem honest enough to me ;-)
Most here seem to be under the misguided notion that only the USA is corrupt. China is far more corrupt
Another point that I rarely see mentioned is that China counts private construction, not the sales of that private construction, in their GDP, meaning that doing things like building ghost cities keep the proles from revolting while also boosting GDP figures. This isn't totally unreasonable since the banks are a government operation, but it does inflate GDP, just as deficit based gov't spending in the US does.