With China set to announce its third-quarter gross domestic product report on Monday, skepticism over its economic data is arising anew.
Recall that Bill Gross has described China as “the mystery meat of emerging-market countries.” Premier Li Keqiang, before taking that post, said he didn’t rely on official statistics. He preferred things like rail freight and electricity use to gauge activity.
So is China about to puff up its economic report card once more?
Quite the contrary, according to one of the world’s foremost emerging market investors, Mark Mobius.
“I know there’s a lot of debate as to whether the numbers are true, whether it’s really 7 percent, but our numbers indicate that it is at least that,” the chairman of the emerging-markets group at Franklin Templeton Investments said in a recent interview with Bloomberg TV. “We think that a lot of the economy is not really being counted because China is being converted from a manufacturing-oriented economy to a service economy.”
That gels with the view of Rhodium Group analysts in a September report for the Center for Strategic and International Studies.
Their 200-plus page study found China’s GDP methodologies are largely in line with international practices and charges that estimates are sheer fabrications are “misinformed.”…China’s economy is bigger, not smaller than official data suggests, the analysts found, with the services sector the hardest to measure and real estate even more important than currently reflected…
As for Monday’s reading, economists forecast the government will say GDP growth slowed to 6.8 percent in the three months through September from a year earlier. That would be the slowest quarterly pace since 2009.
That isn’t deterring Mobius, who says: “The transition is definitely on its way and is going to be successful.”
I could write pages on the topic – and won’t. I honestly don’t think the average American cares enough to look beyond the party line fed officially from the White House and Congress – and willingly, by the Beltway Press like the Washington POST. And, of course, that includes the New York TIMES. Just let me back up a Wall Street minute.
I was never interested in serious investing for the future. My bad. So, I was really pissed-off when the criminal derivative called the Great Recession hit all of us. What little I had squirreled away in what I thought were safe, conservative funds was diminished by over half in a matter of weeks.
Pissed-off, I decided to manage my savings myself. Took what I had left to cash and studied business and industries I knew something about and prepared for the start of the slow turnaround I expected. After all the creeps in charge had damaged the world economy as severely as the Wall Street Crash of 1929. Some aspects of economic life might never return.
I started investing just a few months before March, 2009 – the bottom. Since then, the cash I had has multiplied over 500%. The industries I knew about were mostly geeky, tech-oriented. My business experience the last 30 years was grounded in Asian producers, American companies invested in Asia.
I spent those years witnessing all the usual crap about Asian misconceptions: country by country, Japan, Taiwan, finally China. I learned how to survive a culture of bribery that was thousands of years old – and changed dramatically in just the past few years. I chuckled over Americans discovering Chinese Marxists figuring out how to heat up the achievement of socialist ideals through a market economy – something I was berated for seriously discussing in the late 1950’s. Really.
I’ve watched and listened to the same official crap, pandered and promulgated by everyone from the Compradore pimps who fled China with Chiang Kai-shek in 1949 to the short sellers who make a quick fortune with their quarterly expose of one or another corrupt little corporate entity – blathering about crooks who couldn’t even stand in the shadows of the truly corrupt barons of Wall Street – or Wolfsburg.
But, I also paid attention to folks like Stephen Roach, Peter Nolan, Richard Evans and, yes, Mark Mobius…and former White House advisors like Ian Bremmer because after all, even if Obama’s foreign policy can’t and won’t improve upon that of John Foster Dulles – he still really needs to know what is going on.
I guess I probably should have gotten pissed off, sooner, eh? 🙂