Is China’s economy actually growing by 7.5%? No, not really

[Hellraiser007]

Is China’s economy actually growing by 7.5%? No, not really

There’s a fun game that happens at the beginning of each quarter: figuring out what China’s GDP growth really is. Let’s kick off a round of that with what China’s GDP growth rate would look like if it used the international standard for measuring its growth.
The 7.5% growth China reported on Monday compares output from Q2 2013 with that of Q2 2012. But most major world economies do it differently. The method used for, say, the US’s Q1 GDP of 1.6% measures Q2 output against Q1, adjusting for seasonal factors and annualizing it (meaning, projecting what annual growth would be if the economy kept growing at the Q2 rate). This approach captures momentum more quickly than the year-over-year method China uses.
Measured by international standards, China’s GDP growth rate is actually much lower than 7.5%. It’s just shy of 7%, in fact:

Also of note: growth picked up in Q2, compared with Q1, according to China. But it fell by the year-over-year measures—from 7.7% in Q1 to 7.5% in Q2. What accounts for the discrepancy between China’s quarterly and annual data trends?
Unfortunately, the government doesn’t offer any explanations with its data. It’s possible, though, that the Q2 surge in investments like infrastructure and property boosted economic output compared with Q1′s investments, at the same time as the overall economic slowdown—and possibly a slowdown in consumption—offset that uptick in year-over-year measures.
That interpretation takes government data at face value. But many prefer not to. Société Générale’s Wei Yao is skeptical of the convenient surge in recent investment, as FT Alphaville highlights. That spike offset a fall in net exports (though not in the size of the trade surplus itself).
She also highlighted the fact that the government’s inflation calculations were oddly low. If Yao is right, it means the government recorded gains to the GDP that came simply from rising prices, and not actual increases in output.
A much darker reading still comes from Lombard Street Research’s Diana Choyleva. Not only does she dismiss the government’s estimates, but her calculations showed China’s GDP actually contracting in Q2, compared with Q1. Here’s a look at LRS’s GDP projections versus the seasonally adjusted data that the Chinese government releases:

Like SocGen’s Yao, LRS also finds the government’s inflation measures to be dubious. As a result, it calculates real GDP based on its own price data.
As for the future: “Weak external demand, an overvalued yuan, decimated corporate profits and high real interest rates could well push the economy into a technical recession in Q3,” writes Choyleva. In other words, the real pain has yet to come.

Is China’s economy actually growing by 7.5%? No, not really. – Quartz

 

[BigDaddyWatch]

Also of note: growth picked up in Q2, compared with Q1, according to China. But it fell by the year-over-year measures—from 7.7% in Q1 to 7.5% in Q2.

This kind of diversions between the yoy growth rate and the mom growth rate happens with all countries GDP data. Either China is telling the truth or all countries in the world are lying about their economic performance. I personally think its the latter.

Give it up China will slow over the coming years and will have to deal with its problems. And so does India. For China they have to unwind the credit binch from over the past 5 years and for India the problem is that the hot money that has helped to fuel India's consumption is leaving the country and India will have to find other ways to finance its current account deficits. For both countries it means tighten the monetary policies and lower growth in the years ahead or both countries will face a massive day of reckoning.

 

[veekysingh]

This kind of diversions between the yoy growth rate and the mom growth rate happens with all countries GDP data. Either China is telling the truth or all countries in the world are lying about their economic performance. I personally think its the latter.

Give it up China will slow over the coming years and will have to deal with its problems. And so does India. For China they have to unwind the credit binch from over the past 5 years and for India the problem is that the hot money that has helped to fuel India's consumption is leaving the country and India will have to find other ways to finance its current account deficits. For both countries it means tighten the monetary policies and lower growth in the years ahead or both countries will face a massive day of reckoning.

this thread is about china , india is just a third world poor country with 80% POORS LIVING in here , happy ? now just stick with the topic. @mods can you pls tell our Chinese friend that as per rule u don't hv to shoot the messenger and post only as per topic , and op article not have word india in it anywhere.

 

[Snowden]

this thread is about china , india is just a third world poor country with 80% POORS LIVING in here , happy ? now just stick with the topic. @mods can you pls tell our Chinese friend that as per rule u don't hv to shoot the messenger and post only as per topic , and op article not have word india in it anywhere.

Indians should not be throwing stones living in a collapsing economy and currency. We are above Indians.

 

[veekysingh]

Indians should not be throwing stones living in a collapsing economy and currency. We are above Indians.

see dude , if u can read English , where does it says indan gov. or any indian agency said anything about supa duppa Chinese economy ? or u just hurt cause a indian posted this article here on PDF?

 

[Hellraiser007]

see dude , if u can read English , where does it says indan gov. or any indian agency said anything about supa duppa Chinese economy ? or u just hurt cause a indian posted this article here on PDF?

His as$ is on fire these days

 

[Okemos]

Man, why are you posting similar topics again and again? We all got your message that China's economy is collapsing, ok? Thanks for caring so much about China.

 

[veekysingh]

Man, why are you posting similar topics again and again? We all got your message that China's economy is collapsing, ok? Thanks for caring so much about China.

see we also keep saying same thing, not to worry about us to Chinese members and ruin indian section threads. but that not stop them bringing about indian poors and toilets in every thread , does it my Chinese friend? here we didn't even said a single word , a guy just posted a article from western media , so pls leave with it , and tell you countryman not to bring india in every thread which not say china is supa duppa. ta-ta

 

[Snowden]

see we also keep saying same thing, not to worry about us to Chinese members and ruin indian section threads. but that not stop them bringing about indian poors and toilets in every thread , does it my Chinese friend? here we didn't even said a single word , a guy just posted a article from western media , so pls leave with it , and tell you countryman not to bring india in every thread which not say china is supa duppa. ta-ta

Indian economy is collapsing with the Rupee now worse than the Zimbabwe dollar. Indian economic miracle is finished.

 

[HongWu]

India is just getting poor and poorer. The rupee is the most worthless since UK created India.

Rupee closes at record low of 61.10/dollar | Business Line

 

[navtrek]

Indian economy is collapsing with the Rupee now worse than the Zimbabwe dollar. Indian economic miracle is finished.

It cannot be finished for one simple reason the shear size of the country and its population.

 

[Kolaps]

7%...???

Shameful mainland China!!!

LAZY LAZY LAZY LAZY LAZY!

In Taiwan, we already held a massive protest on the street! There will be another fight in the parliament.

 

[veekysingh]

Indian economy is collapsing with the Rupee now worse than the Zimbabwe dollar. Indian economic miracle is finished.

first you don't know anything about economy , week currency doesn't mean bad economy. I don't know how they teach you guys I china. but they 井底之蛙 , how would you know anything other thenwhat cpc books says.

India is just getting poor and poorer. The rupee is the most worthless since UK created India.

Rupee closes at record low of 61.10/dollar | Business Line

we are still third largest economy ( by PPP) . go cry , and again I would like to notify topic is about china not india so pls do not drag us here. @mods where are the rules now?

 

[cirr]

India's Q1 2013-2014 GDP figure will be out in a month or so。

Preliminary estimates point to y-o-y growth of 4.5-4.8%。

The rupee has collasped and will continue to search for new lows in the coming weeks and months。

Yet our Indian friends are worried by China's 7.6% growth for H1 2013，which，though low by China's standards，is still over 50% faster than India can manage。

And China has all the monetary、fiscal and other policy tools（such as removing restrictions on the purchase of autos and real estates） to give multiple boosts to its economy should the situation demand，while India has NONE，absolutely NONE.

 

[cirr]

first you don't know anything about economy , week currency doesn't mean bad economy. I don't know how they teach you guys I china. but they 井底之蛙 , how would you know anything other thenwhat cpc books says.



we are still third largest economy ( by PPP) . go cry , and again I would like to notify topic is about china not india so pls do not drag us here. @mods where are the rules now?

Stop the PPP nonsense。

At about 1.8 trillion US dollars，India's GDP has stalled for years。And FY 2013-2014 will be no exception。Your pathetically low poverty line says it all。