Wednesday, October 24, 2012

Has China's Q3 GDP been grossly overstated?

Here is an interesting interview with Gordon Chang, who believes that China's GDP growth in Q3 has been grossly overstated. In his opinion the number should be closer to zero.

His view is based on slow growth in electricity production across China as well as consistently weak PMI numbers. The HSBC PMI has been showing a mild contraction every month throughout 2012.

China PMI (Source: HSBC/Markit)

He also points to an increasing risk of social unrest in China - which hasn't been covered by the media. This stems directly from the slowdown and the wealth inequalities that have developed in the country in recent years.
YF: - Another area of concern for Chang is the potential for unrest. While the saga surrounding workers at the Foxconn factories where Apple gadgets are made has been well covered, Chang says it barely touches on what is happening on a broader scale.

"Across Chinese society, the one factor that people always talk about is the anger," he says. But the reality is that the central government in Beijing no longer produces statistics on uprisings and protests, which by his estimates are now probably occurring at a rate that is ''north of 200,000 per year."
Related Posts Plugin for WordPress, Blogger...
Bookmark this post:
Share on StockTwits