Me no likey wot goin' on in China!

Bloody Churchill!  That man nicked - alright, alright, invented! - all the best lines including that one about Russia and mysteries wrapped up in enigmas and all that, so I can't use it for today's China where it is equally apt.  China is a head-scratcher of the first order.  Just when you think you might be seeing glimpses of reality or even, God bless my soul, the truth, 'evllyting go velly shifty'! [That's enough waffle - get on with it: ED.]

Right, so, first of all look at this diagram courtesy of Zero Hedge:

 

 

Now, you, like me, might have thought that when it came to pulling money out of top hats then no-one could do it better or more profusely than Uncle Sam but you would be wrong.  In November, at least, the Chinese out-printed not only America but Japan as well!  Mr. Durden of Zero Hedge sums it all up with his usual sardonic but chilling wit:

So how long before the developed and developing world "have" to create
$1 trillion or more in money supply each month to keep the house of
cards from toppling? [His emphasis]

Meanwhile, over at the WSJ, they are asking what I have been thinking for some time, that is, just how real are Chinese economic statistics?  Every month, every quarter, every year, the Chinese pour forth a wok-full of statistics to tell us that all is well in the wonderland of the (Chinese) working-class Utopia.  In response, I keep reminding myself of an old American saying - by the way, where would we be without American sayings, oh, and Churchill, too, of course - 'if something is too good to be true - it ain't true!'

Now, I don't want my old e-pal, JK, coming back here in ten year's time (I should live so long, my life already!) and quoting me after he has found some stats somewhere proving that China's economy and standard of living has quadrupled or even 'gazzupled' because I know it has.  After all, they started at the bottom as an economic basket-case so it didn't require too much in the way of faux-capitalism to set them on the road to prosperity.  So yes, the early stats are quite remarkable and even possibly accurate because there was no need for mis-information not least because you could see the prosperity all around you in places like Shanghai.  But now, today, they are up there at the top of the pile but one is entitled to ask - a pile of what exactly?

Apparently, six years ago when  he was a provincial party boss, even the current prime minister, Mr. Li Keqiang, expressed severe doubts concerning Chinese economic statistics.  The WSJ report points to a new way of judging reality based on more 'Billy Basic' economic data which is rarely subject to, shall we call it, manipulation:

The London-based research group uses one of Mr. Li’s favorite indicators, electricity output, as a proxy for industrial activity.  It adds four others – freight shipment (a broad measure of economic activity), floor space under construction (real estate); passenger travel (service sector); and cargo volume (international trade).

“They are relatively low profile (statistics), so should be subject to fewer questions about data manipulation,” Capital Economics explained.

On the basis of those figures they have produced the following chart:

 

 

Well, I'm not expert enough to analyse firm conclusions from that but it does look to me as though the Chinese government has been a little "economical with the actualité" in the last couple of years.  Perhaps the City experts should use money printing as a proxy!

 

Comments

[Antisthenes]

I am an avid follower of Zero Hedge as I am a manic pessimist and they ladle it up in s**t loads. However I am starting to get withdrawal symptoms as crises are tapering off and Zero Hedge predictions of doom and gloom are not being realised.

[David Duff]

Ah, but as gloomy Mr. Durden would no doubt say, when it all goes quiet and placid, a shit-storm is just around the corner! Of course, in the end he will be proven correct but then (stand by for oft-repeated saying) 'as in sex and drumming, timing is everything'. God, I'm boring!

[backofanenvelope]

Chinese economic stats will say what the Chinese Communist Party wants them to say. The end justifies the means you know..........

[David Duff]

Quite so, BOE, but it's the dummies in the west, some in important positions of power, who swallow these 'pan-flied' stats whole who worry me. China is like a giant teenager swaggering about in a crowded room unaware of the potential for collateral damage.

[Dom]

They're catching up to you next door.

[David Duff]

Don't know how you did that, Dom, but I particularly enjoyed:

"Duff is hated as the most cruel monster and blood-thirsty beast, drenched various parts of the world in blood, and will find that their desperate moves will be smashed."

I might put that on my masthead!