A number of people have approached China’s GDP figures via the backdoor of coincident indicators, most notably Premier Li Keqiang. Partisan work has been done concluding official GDP numbers must be a multiple of reality but in the very brief (a merciful 3-pages) paper highlighted this week from Jun Nie of the Federal Reserve Bank of Kansas City (a non-partisan I assume?), he reckons they’re probably about right.
Worryingly though he notes a deviation from his model in 2015 that he thinks might have been the result of financial market frothyness which doesn’t look like it’ll repeat this year. Therefore top-line GDP growth is likely to be pressured from the manufacturing AND the services sector in 2016.
You’ll find the paper via this link Gauging the Strength of Chinese GDP Growth.
If the voracity of data from China is of real interest I can recommend the best book to date on the subject, published relatively recently. ‘Myth-Busting China’s Numbers’ is the culmination of 20-years of professional data gathering in China by Mr. Matthew Crabbe. You can find more on that at Myth-Busting China’s Numbers.
Happy Sunday.