採訪/常春 編輯/宋風 後製/周天
China’s Official GDP Data May Be Worse Than Reported
The latest release of China’s National Bureau of Statistics showed 7.6% GDP growth in the 2nd quarter of 2012. This is the lowest level since the first quarter of 2009. However, the reality is much worse than the published data.
The investment-driven growth model has reached the end, commented economic professionals.
China’s official monthly economic data released on July 9 showed a year-on-year drop by 2.1% for the Producer Price Index (PPI) in June 2012. This was negative growth for the 4th consecutive months, along with a growing decline in range. Total imports in June fell more than expected, indicating an “ongoing weak demand” in China. The country’s economy is expected to show a continuous slowdown in the 2nd half of year.
Quite a few economists suspect a worse case scenario exists in reality than the one alleged by China’s official data.
London-based research firm Capital Economics invented its own index during 2008-09 to measure China’s true economy. They rely on electricity production, train traffic flow and the figures of construction projects commencing.
Capital Economics’ proxy indicator apparently showed that China’s economy grew by half a percentage point lower than the official figure in the first quarter of 2012.
The Radio France Internationale (RFI) commented that some local authorities in China were suspected of exaggerating electricity production growth rates.
Mr. Zheng, an anonymous scholar of economics in China thinks pessimisticly about the country’s economy. He forecasts a stagflation will come shortly followed by a deflation. He warns of tough times ahead, given the current
Mr. Zheng: “The openly available data is not reliable with those figures of 8%, 10% and similar. We all know where these figures came from. The true Gross
Domestic Product (GDP) figure of China doesn’t exceed 5%. More accurately, it could even be a little more than 3%, based on the information I have.”
Mr. Wang from Capital University of Economics & Business thinks that life could be hard in China in the next couple of years. The GDP is expected to continuously decline.
Mr. Wang: “With the price going up, a lot of industries have lost their competitive edge. The real economy is also going through a harsh time. The financial transition went a little overboard. The entire economy now presents with an obvious downward trend."
China’s central bank cut interest rates twice this June. The regime’s Premier Wen Jiabao recently stressed, “Maintaining investment is the key to expand domestic demand and secure the growth." Wen admitted that China’s property market control is a really hot potato.
US-based economist Dr. Jian Tianlun says China’s economy is trapped into a dilemma; Excessive slowdown may lead to an economic hard landing, while the real estate bubble will be further expanded.
Dr. Jian Tianlun: “The PPI data was negative for the 4th month in a row, which means that China’s demand is shrinking. A further substantial slowdown in its economic growth, exports, imports, and investment. That』s why China’s central bank cut interest rates twice
in one month.”
Dr. Jian says that the two interest rates cuts indicated China’s economy has been in big trouble. Also cutting interest rates may lead to further deterioration of the property bubble, he thinks.
Scholars warned China’s official encouragement in boosting investment was to push economic growth.
Professor Xu Xiaonian at China Europe International Business School said in public that today’s economic predicament in China was precisely caused by the traditional “investment driven" growth model. The model has come to an end now, he claimed.
The authorities’ domestic demand stimulation only pulled on the investment demand. This will worsen the issue of overcapacity, he feels.
Prof. Xu proposed to revive the private sector, which is a must for China to get through the existing hardships.
Shi Yuzhu, President and CEO of Giant Interactive, revealed some opinions in his Sina microblog on July 12th. “All enterprises in China are now generally short of capital, excluding monopolies.” he said.
In conclusion, the unchanging establishment in China will only make the resulting problems it created more entrenched.