Commentary on the China GDP data today
The BBC report:
- China has reported its latest economic growth data and once again it's almost perfectly in line with the official target.
They quote various analysts who give reasons for the manipulation of the data (bolding mine as a summary):
"We all know the growth data is overstated, particularly at the moment," says Hong Kong-based investment analyst Peter Churchouse. "It's a political gesture: They have to keep the domestic markets believing that growth is roughly close to 7%."
"There is a risk of smoothing it because of the political rationale. But it's as much technical constraints in terms of data management and collection as outright political manipulation," explains Tom Rafferty of the Economist Intelligence Unit in Beijing.
The way that the GDP growth figure is collected poses another problem. The data comes from provinces across the country and as much as Beijing stands accused of inflating the overall number, the individual provinces are thought to also beef up their results.
In December 2015, even Chinese state media suggested that regional economic data had been drastically inflated with one province reporting revenue 127% higher than the actual number.
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I've noted a few people defending the veracity of Chinese data today, both on twitter and here in the comments. I try not to despair of such naivety.
But, traders on ForexLive are grown up enough to make up their own minds, either way.