Thursday, January 26, 2012

China's Very Mysterious Data

China is crashing and it is getting much more difficult to hide the fact. Ambrose Evans-Pritchard  writes:
A quick observation.

I could not help noticing that China’s imports from Japan fell 16.2pc in December. Imports from Taiwan fell 6.2pc.

The Shanghai Container Freight Index fell 1.4pc to a record low of 919.44 in November, after sliding relentlessly for several months. It has picked up slightly since.

The Baltic Dry Index measuring freight rates for ores, grains, and bulk goods, has fallen 44pc over the last year. Kasper Moller from Maersk in Beijing said weak Chinese demand for iron ore was the key culprit.

Cautionary warning. The BDI index also reflects the shipping glut, so it is not a pure indicator.

However, rail, road, river and air freight volume for the whole of China fell to 31780m tons in November (latest data), from 32340m tons in October. Not a big fall, but still negative. (National Bureau of Statistics of China.)

Chinese electricity use was flat in over the Autumn, with a sharp fall in the (year-on-year) growth rates from 8.9pc in September, to 8pc in October, and 7.7pc in December.

Residential investment has been contracting on a monthly basis, and of course property prices are now falling in all but two of China’s 70 largest cities.

So how did China pull off an economic growth rate of 8.9pc in the fourth quarter?

Beats me.

I strongly suspect that the trade and power data reveal the true state of China’s economy.

(Thanks 2 Lew Rockwell)


  1. With dictatorships such as China, one must look deeply into raw unprocessed data to get at the truth.

    China is not a simple Potemkin Village facade. It is a Cargo Cult Potemkin Village facade, which suggests a much higher expectation for its ghost infrastructure. China expects genuine prosperity from its overbuilt infrastructure to nowhere, not just the respect of outsiders.

    1. This is a fascinating observation and it reminds me of the cargo cult industrialization seen during the Great Leap Forward in the form of backyard furnaces:

      I guess Mises was right!

  2. Its easy to grow 8pct when the denominator is still small relative to the potential of your economy. Given the population of China an 8.9pct growth rate would be like a 2.2% (8.9pct x 300m/1.2b) growth rate in the US. I know that's a very simplistic analysis, but it does put it into perspective somewhat.

  3. Excellent !! any share investor should be happy to read the above information

  4. You Western Naysayers , gloom-mongers put up or shut up. Its bad enough you Westerners caused the world financial glut. Without India and China contributing to world growth, we would still be in a recession and here you are engaging in useless speculation baying for another country's blood. What did China do to you or the world compared to UN-relenting West imperialism over the years?

    1. Your response is emotional. People here are attempting to sort out reality. A good analysis requires good facts and this article supplied it.