State media's
censoring of comments by Chinese Minister of Finance Lou Jiwei is a window into
the discord in Beijing over how to handle the economy.
Monday morning, Beijing’s National Bureau of Statistics
announced that gross domestic product in the second calendar quarter increased
7.5% from the same period last year, hitting median
estimates squarely on the nose.
The announcement confirms China’s growth is slowing but
does not fully capture the recent falloff.
What is the real growth figure? Seeking Alpha thinks
it is around 6.7%, but even that figure is high. Among other factors, the
severe contraction of aggregate financing in June, the marked fall in exports
in May and June, and the evident shrinkage of the manufacturing sector
throughout the quarter all point to an economy growing in the low single
digits.
Moreover, it is unlikely that NBS, in releasing the Q2
number, had made proper adjustments to account for two phenomena. First,
Beijing’s official statistics have not been adequately adjusted for inflation,
as Standard
Chartered Standard Chartered’s
Stephen Green has
pointed out. Second, fake trade invoicing substantially inflated GDP
numbers. Rampant falsification has resulted in the simply unbelievable report
of 14.7% export growth in April, the first month of the just-ended quarter.
Although some say
export growth was about 6% then, it seems like it was actually closer to 3%....To Read More…
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