Who Believes China’s ‘Bernie Madoff’ Data?

I don’t want to spend too much time on this, but I have to laugh every quarter when we get economic data out of China.

China’s economy expanded at the fastest pace in a year as stimulus spending and record lending growth helped the nation lead the world out of recession. Gross domestic product rose 8.9 percent in the third quarter from a year earlier, the statistics bureau said in Beijing today. The median of 34 estimates in a Bloomberg News survey was for a 9 percent gain. Separate reports showed industrial production and retail sales accelerated in September.

The dollar headed higher and Asian stocks dropped on concern that the acceleration in China’s growth will spur policy makers to consider withdrawing record fiscal and monetary stimulus in coming quarters. Qin Xiao, chairman of China Merchants Bank Co., this week said it’s “urgent” for the central bank to tighten policy to avert asset-price bubbles.

I look askance at the US economic data — skewed, massaged, modeled to within an inch of its life. But its mostly transparent, with the statisticians readily available for further discussion.

The Chinese data looks to me as if it is issued by edict — they are non-transparent, well managed, and remarkably consistent over time.

I wonder if Beijing’s accountant is an 80-year-old with offices in New City and Florida . . .


Originally published at The Big Picture and reproduced here with the author’s permission.

56 Responses to "Who Believes China’s ‘Bernie Madoff’ Data?"

  1. Anonymous   November 2, 2009 at 4:05 am

    I dont get these comments

  2. Anonymous   November 2, 2009 at 10:30 am

    This article nailed the surface of the situation, if it goes deeper it’ll find that US capitalism is different from the version of Chinese capitalism therefore it is meaningless to compare apples and oranges.Currency, as everyone is so excited about is merely an instrument between two “incompatible” systems. The error everyone making is they took what China’s foreign currency on it’s value, while in fact it should’ve been debited by spending within China’s growth. Where is value of the so called foreign reserve? It is just like Madoff thats where.

    • Anonymous   November 8, 2009 at 9:13 am

      US buys goods from China in USD, the Chinese banks under strict currency control “converts” the USD to RMB and gives it to the Chinese business, then keeps the USD as cash on hand. China buys US BOND using these USD… This questionabe conversion is what everyone overlooked.It is why new buildings goes up in China, and Foreclosure signs goes up in US. Chinese are making the same dollar works twice, an US is buying it twice.

  3. Marfan Syndrome   April 13, 2012 at 8:48 am

    Great post.Thanks for sharing such a useful information with us.