China’s Season of Magical Thinking and Accounting
Beijing’s statistics may or may not be cooked. The big numbers still don’t tell you how ordinary people are doing.
How high for how long?
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The news out of China sounds good: First quarter gross domestic product growth at 5.3% was higher than expected, according to the country’s National Bureau of Statistics, handily beating the 5% official target. While some analysts adjusted their China assessments upward, skepticism prevails. Shuli Ren says it’s not just because the People’s Republic has a reputation for economic numbers that are suspicious, but even if the headline growth figure is accurate, it doesn’t reflect how ordinary folks are faring. For one thing, the 5.3% is real GDP, which is adjusted for inflation and, as Shuli says, “doesn’t offer useful insights into stagnant income growth experienced by workers and corporations” because China’s economy is “experiencing its longest deflationary streak since 1999.” She points out that the country’s CSI 2000 Index “whose small-cap companies are more sensitive to business cycles, is down 20% for the year.”