There is a good article in the Wall Street Journal today on the manipulation of Chinese economic data. The title will tell you quite a bit about the content: China Says Growth Is Fine. Private Data Show a Sharper Slowdown.
Most China followers find the growth China shows a little too optimistic and amazingly aligned with the goals set by the Chinese Communist Party. For many years Russia had the same problem with harvests and production data. It should be obvious that there are consequences for not meeting a production target so it is better to meet the number whether there was actual production to meet it, or not. We know why some people do that, but the U.S. is getting better at getting to the real financial data by some really clever ways. Included in this article were stories about satellites measuring the amount of electricity being used in certain cities, production data from unofficial sources like banks that loan money for autos, and some U.S. companies with operations in China. One, Eaton, reported industrial growth was 2.7% but the official Chinese estimates were 5%. When China's economy is at $13 Trillion, those one or two percent differences can be a lot of money.
Most China followers find the growth China shows a little too optimistic and amazingly aligned with the goals set by the Chinese Communist Party. For many years Russia had the same problem with harvests and production data. It should be obvious that there are consequences for not meeting a production target so it is better to meet the number whether there was actual production to meet it, or not. We know why some people do that, but the U.S. is getting better at getting to the real financial data by some really clever ways. Included in this article were stories about satellites measuring the amount of electricity being used in certain cities, production data from unofficial sources like banks that loan money for autos, and some U.S. companies with operations in China. One, Eaton, reported industrial growth was 2.7% but the official Chinese estimates were 5%. When China's economy is at $13 Trillion, those one or two percent differences can be a lot of money.
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