China has a long tradition of manipulating its financial data to meet its political needs. That ability is still prominently present, also today, says political scientist Victor Shih in the Global and Mail. China´s economy is much weaker than official figures suggest.
The Globe & Mail:
For investors, miners and even foreign governments whose revenues depend heavily on its demand, China has become the land of eternal economic sunshine. But nearly 40 years after it began to open to the rest of the world, it is increasingly beset by shadows.
Officially, there is little to worry about. Government statistics show growth not far off a 7.5-per-cent gross domestic product increase target for this year. And come December, chances are “they will say, ‘oh guess what? We just made 7.5 through a series of fortunate circumstances’ – like our ability to manipulate data,” said a sarcastic Victor Shih, an associate professor at the University of California at San Diego who has for years raised alarms about the country’s economy.
“At the end of the day, you have to rely on more objective data. And if steel and electricity consumption are both falling, it really suggests the Chinese economy is doing a lot weaker than what the official numbers suggest.”
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