China's GDP expands 7% in Q2

[EAsian]

In 2007, Li Keqiang, a Chinese provincial official, let the American ambassador in on a little secret: China's GDP figures are "man-made" and therefore "unreliable."

He told the ambassador that most of the country's economic data, and especially its GDP, should be used for "reference only," according to a diplomatic cable published by Wikileaks.

Li, an economist by training, is now China's prime minister. But back in 2007, when he was still a rising party official, he described a preferred alternate method for measuring economic growth: look at electricity consumption, railway freight volume, and bank loans.

On Wednesday, the debate over the accuracy of China's GDP figures was revived after officials announced that the economy grew by 7% in the second quarter -- a level that few economists thought probable. First quarter GDP also came in at 7%, and Beijing's official growth target for 2015 is ... you guessed it: 7%.

"Stronger-than-expected GDP growth will inevitably spark renewed questions over the veracity of the official data," said Julian Evans-Pritchard of Capital Economics. "We think that actual growth is almost certainly a percentage point or two slower."

The debate over GDP numbers is a favorite topic for China watchers. Some are convinced that China is cooking its books. Others believe state statistics are largely reliable and useful. Still others debate the accuracy of certain data classes, and point to more meaningful alternatives.

Much of the current controversy is about the "GDP deflator," a statistical tool used to calculate GDP. Nobody has accused China of manipulating the measure, but some economists think the way it's calculated means growth is being overstated.

Chinese statistics officials deny there is a problem.

"China does not underestimate its GDP deflator and we don't overestimate our GDP," National Bureau of Statistics spokesman Sheng Laiyun said Wednesday.

In the past, criticism of GDP calculations was mostly tied to "GDP worship." The best way for officials to get a promotion, be it at the village or provincial level, was to hit -- or exceed -- growth targets, and then send the good news along to Beijing. This led to all kinds of funny business.

"China does not have an independent statistics bureau," said Andy Xie, an independent economist. "It depends on local governments reporting the numbers from the bottom up, and local governments do have an incentive to distort numbers."

Xie, a former chief economist for Asia-Pacific at Morgan Stanley and noted China bear, said the country's current GDP is probably closer to 4% or 5%. He recommended looking at wage growth, exports, auto production and electricity consumption instead of GDP. But even that leaves something to be desired.

"Lately, we even have noticed that local governments are fudging the electricity numbers, because they know senior leaders are looking at the electricity number," he said.

Is China cooking its books? - Jul. 15, 2015

I think all these indicators are reducing in USA.Do I need show you the datas？Does that mean US economy is actually reducing？People see things in colored glasses .It‘s all propaganda，true economists know that,But then After all,China is the biggest threat of your western countries,so it's understandable.毛泽东说过，战略上藐视敌人，战术上重视敌人。西方国家在战略上贬低中国，唱衰中国，鼓吹中国奔溃论，阻挠外资投资中国。在战术上重视中国，限制先进技术出口中国，向大众灌输中国威胁论以增加军费。这种策略从根本上来说是及其自然的。

 

[The Last of us]

But I thought the Chinese economy was going to crash?
Congratulations to our Chinese friends. You guys continue to impress with your impressive growth.
Iran-Sino trade were already nice but after the nuclear agreement, lets hope for that to sky-rocket
Here to the future of Iran-China relations

 

[EAsian]

In 2007, Li Keqiang, a Chinese provincial official, let the American ambassador in on a little secret: China's GDP figures are "man-made" and therefore "unreliable."

He told the ambassador that most of the country's economic data, and especially its GDP, should be used for "reference only," according to a diplomatic cable published by Wikileaks.

Li, an economist by training, is now China's prime minister. But back in 2007, when he was still a rising party official, he described a preferred alternate method for measuring economic growth: look at electricity consumption, railway freight volume, and bank loans.

On Wednesday, the debate over the accuracy of China's GDP figures was revived after officials announced that the economy grew by 7% in the second quarter -- a level that few economists thought probable. First quarter GDP also came in at 7%, and Beijing's official growth target for 2015 is ... you guessed it: 7%.

"Stronger-than-expected GDP growth will inevitably spark renewed questions over the veracity of the official data," said Julian Evans-Pritchard of Capital Economics. "We think that actual growth is almost certainly a percentage point or two slower."

The debate over GDP numbers is a favorite topic for China watchers. Some are convinced that China is cooking its books. Others believe state statistics are largely reliable and useful. Still others debate the accuracy of certain data classes, and point to more meaningful alternatives.

Much of the current controversy is about the "GDP deflator," a statistical tool used to calculate GDP. Nobody has accused China of manipulating the measure, but some economists think the way it's calculated means growth is being overstated.

Chinese statistics officials deny there is a problem.

"China does not underestimate its GDP deflator and we don't overestimate our GDP," National Bureau of Statistics spokesman Sheng Laiyun said Wednesday.

In the past, criticism of GDP calculations was mostly tied to "GDP worship." The best way for officials to get a promotion, be it at the village or provincial level, was to hit -- or exceed -- growth targets, and then send the good news along to Beijing. This led to all kinds of funny business.

"China does not have an independent statistics bureau," said Andy Xie, an independent economist. "It depends on local governments reporting the numbers from the bottom up, and local governments do have an incentive to distort numbers."

Xie, a former chief economist for Asia-Pacific at Morgan Stanley and noted China bear, said the country's current GDP is probably closer to 4% or 5%. He recommended looking at wage growth, exports, auto production and electricity consumption instead of GDP. But even that leaves something to be desired.

"Lately, we even have noticed that local governments are fudging the electricity numbers, because they know senior leaders are looking at the electricity number," he said.

Is China cooking its books? - Jul. 15, 2015

The electricity consumption of USA is actually reducing 1.3% in 2015 from January to April of 2014 .What does that mean by your logic?

 

[大汉奸柳传志]

But I thought the Chinese economy was going to crash?
Congratulations to our Chinese friends. You guys continue to impress with your impressive growth.
Iran-Sino trade were already nice but after the nuclear agreement, lets hope for that to sky-rocket
Here to the future of Iran-China relations

Oh on, Congratulations should be said the other way around.

To think about the rise of a modern Persian Empire is much more exciting than our quarterly GDP figures.

 

[TaiShang]

GDP figures offer credible economic reassurance
2015-7-15 20:23:01

China's GDP rose 7 percent in Q2, 2015, the National Bureau of Statistics said in a statement Wednesday. This beats most predictions from both domestic and foreign economists of a 6.8 or 6.9 percent growth. It shows that the Chinese economy is improving in a stable manner, which is a good sign as uncertainties are still haunting the world economy.

Investment, consumption and exports are rebounding. Consumption inspiringly contributes to 60 percent of the growth, 5 percentage points higher than the previous year. Besides, the tertiary industry is playing a larger role in the economic growth. Private business is booming; industries labeled "Internet Plus" are surging; starters of small and micro businesses are turning dynamic. All this evidence demonstrates that the efforts to rearrange the economic structure and steady economic growth have taken effect.

It is still too soon to assert that the 7 percent growth rate is the bottom of the economic trough. But China's latest economic performance has fueled people's expectation that the Chinese economy might be better in the second half of the year than the first half. The yearly growth rate might be above 7 percent, way higher than the predications most international organizations gave earlier this year.

The bottom of the trough could be anywhere. The Chinese economy could be much worse if the government and companies just left piles of problems unresolved. However, they are engaged in a joint undertaking to make sure targeted economic policies and measures have taken root as expected. Both the Chinese people and the government have maintained the momentum of taking preemptive actions to avoid more problems.

If the growth rate can remain stable at around 7 percent, the "new normal" of the Chinese economy can be consolidated and future development will be sustainable.

More importantly, the Chinese are starting to calm down and embrace the "new normal." A shift of gear in economic development has not inflicted much cost, as per capita income keeps rising, more jobs are created, and environmental maladies are being reduced.

Over the years, Western pundits never cease hyping theories such as the "China threat" or "China collapse," especially in economic terms. However, none of them have offered reliable and empirical observations about when the "collapse" will take place. Some Western countries have been in zero or negative growth for years, but they do not face the danger of "collapse" from the Western perspective. "Collapse" derives from a breakdown in people's confidence.

The Chinese economy might go through more new difficulties in the future. But the country's ability to cope with pressures has been greatly enhanced. China knows that a proper slowdown in economic growth is necessary for economic restructuring.

Still, the 7 percent quarterly growth rate is the lowest among recent years, but positive signs are being revealed. China's efforts to holistically deepen reforms are making more progress.

But I thought the Chinese economy was going to crash?
Congratulations to our Chinese friends. You guys continue to impress with your impressive growth.
Iran-Sino trade were already nice but after the nuclear agreement, lets hope for that to sky-rocket
Here to the future of Iran-China relations

All the best to Iran, my friend. We are very happy to hear that the nuclear dilemma has been finally solved. Iran will doubtlessly become the shining development model in the Middle East. China would be more than happy to take part in the upcoming miracle.

 

[TaiShang]

More firms established in H1 amid improving business environment
2015-7-15 22:01:36

The number of newly registered enterprises in China continued to rise in the first half of 2015, official data showed Wednesday, indicating growing enthusiasm for innovation and entrepreneurship.

The number of new firms jumped 19.4 percent from a year ago to 2.1 million in the first six months, according to data released by the State Administration for Industry and Commerce (SAIC).

"This growth shows that a creative, entrepreneurial spirit has been stoked by business reform," said Yu Fachang, a SAIC spokesperson.

By the end of June, there were around 74.20 million business in China, up 7 percent from the end of 2014, data showed.

The number of new firms registered in the service sector accounted for 80.3 percent of the total, or 1.607 million during the first six months, the SAIC data showed. This is a 22.6 percent increase compared to the same period last year.

Yu said this reflected improvement in China's economic structure, with the service sector playing a bigger role in growth and job creation.

Amid an economic slowdown, China has been improving business registration processes since last year, removing the minimum capital requirements, replacing annual company inspections with a reporting system and loosening site requirements for businesses.

Easier market access and an improving environment for businesses also boosted employment at privately-owned enterprises.

A total of 264 million people were working in the private sector as at the end of June, an increase of 14.54 million from the end of 2014.

***

So, let's sum up:

CHINA’S GDP GROWTH 7% FOR 2015 YTD

How did it break out into details?

[1] Agriculture etc, known as Primary industries +3.5%

[2] Industry & Manufacturing
Secondary Industries are the major manufacturing industries+6.1%
Tertiary Industries include the new innovation industries and they are +8.4%

So the tertiary industries suggests that thereis restructuring to higher end industries and in size it is the largest portion now.

The detail break downs shows China is re-structuring in the business structures. Joint-stock companies, more entrepreneurial, were +7.5% while co-ops and government enterprises were 1.9-2% only

[3] Investments
3.1. Various public and capital projects investments was up over 10%
3.2. Housing which was down before is turning around with an increase of 4.6%.This is a big item and having some growth puts a baseline on the whole GDP

[4] Retail Expenditure which is consumerism. Over 10%
Broken into various categories of retail sales and classes of products and services. They are all running in the increases of over 10%. The fact western analysts have not been analyzing is the fact that there is a lot of savings and pent-up consumption motivations. Without having to promote retail consumption, there is natural growth. And there is a shifting of retail trade to online purchases which are enjoying growths of 39-40%. Households afraid of the future, without good jobs, do not spend.

[5]Export +0.9%
Imports -15.5%

[6]Money supply shows a steady growth in the 7% range. Enough to fund normal transactions and not enough to create a bubble.

Income growth 9.0% and the difference between urban and rural citizens is narrowing further.

China is restructuring not imploding.

 

[opruh]

Indians still daydreaming of surpassing China

 

[TaiShang]

Below figure is Chinese but I guess people can easily read the tables and figure out what they suggest.

超预期的7%——2015中国经济“中考”答卷

 

[TaiShang]

GDP growth is stable, structural changes are on the way
July 16, 2015



(File photo)

China's gross domestic product expanded by 7 percent in the second quarter compared to the same period last year according to data released on Wednesday by China's National Bureau of Statistics. It maintains the same growth rate as the first quarter and matches the government's target for the full year.

Under stable growth, we can see structural changes.

First, growth is mainly driven by the tertiary industry, whose year-on-year expansion is 8.4 percent, compared with 7.9 in the first quarter. This may be related to the stock market and the real estate sector.

In the second quarter the value of the stock market is increasing rapidly, which helps increase profits of financial institutes. After the new mortgage policy, sales in the real estate sector rebounded significantly, and this helps the growth of the tertiary industry.

The second industry growth rate is only 6.1 percent, which is another lower level compared with the first quarter, suggesting that traditional industry is still facing structural adjustment.

As to the structural contributions of investment, consumption and export, the National Bureau of Statistics released only the contribution of consumer spending. The annual total consumer spending is about 60 percent. Compared with the second quarter of last year, the ratio is up 5.6 percent, about 4.2 percentage points contributing to the ultimate growth rate of GDP.

According to data on imports and exports in the first half, we can infer that the contribution of net exports to GDP has also improved. So we may conclude that the demand of domestic and foreign is the main driving force of GDP growth.

Although the real estate industry as well as traditional manufacturing industry has caused some drag on GDP, the government's timely introduction of the "steady growth" stimulus also played a proper cushioning effect.

But there are some worries.

First, relatively ample liquidity has caused a prosperous capital market, but the money has hardly flowed into the real economy. However, the use of leverage causes bubbles and as the deleverage process goes on in the second half of the year the positive effect to the tertiary industry cannot be so strong.

Second, in order to remove the hidden danger of a possible burst of the real estate bubble, the sector can hardly go on to be the main driver of GDP growth.

Third, the traditional pattern of economic growth is to motivate private funds by tax and bank saving into government investment, but with the decrease of investment effectiveness and the need of removal of excess capacity, the decrease of investment can drag on economic growth for quite a long time.

In short, the economy still suffers impact from negative factors such as the removal of product capacity of the manufacturing sector and weakening of real estate, we also note that there are some short-term positive changes, such as stabilized real estate sales and warmer consumption.

Looking forward, although we do not deny that the current economy still has somedownward pressure, there are reasons for optimism:

First, the government on many occasions stresses a steady growth and many executivesset the tone for the whole year's GDP growth rate of around 7 percent. Since last year,China's leaders are in line with the previous "new normal" statement and stressing"bottom line thinking", to ensure that the economy does not suffer systemic risk, but alsogive full consideration to employment needs. Taking into account the government'sfinancial strength and strong executive power, the economy will maintain steady growth.The debt exchange, the promotion of PPP in infrastructure and other stabilizationmeasures will make investment at an acceptable level.

Secondly, with new mortgage policy, repeatedly cutting interest rates and decreasing bankdeposit reserve ratios, domestic real estate sales will show signs of recovery in the shortrun.

Finally, the exchange rate is an important factor affecting external demand, but over thepast few months the factor is gradually improving. Although external demand uncertaintyremains strong, exports in 2015 will remain high.

It is worth noting that since the end of June the stock market fell sharply, which may affectconsumption, especially real estate sales. As the government takes action to save the stockmarket, the market is temporarily stabilized and likely to continue to rise. But theuncertainty remains.

China hopes to develop a sound multi-level capital market, but on a global scale successstories are scarce. It is easy to encourage people to launch a start-up, but it needs time tostart a business. Bubbles can be created in a short time, but companies need to grow over arelatively long period.

The government needs to focus on building market rules, which requires patience.Meanwhile, to maintain stable economic growth may be important to avoid systematic risk,but excessive administrative intervention delayed restructuring of the economy. How tobalance two sides of administrative intervention requires skills.

 

[Jlaw]

GDP growth is stable, structural changes are on the way
July 16, 2015



(File photo)

China's gross domestic product expanded by 7 percent in the second quarter compared to the same period last year according to data released on Wednesday by China's National Bureau of Statistics. It maintains the same growth rate as the first quarter and matches the government's target for the full year.

Under stable growth, we can see structural changes.

First, growth is mainly driven by the tertiary industry, whose year-on-year expansion is 8.4 percent, compared with 7.9 in the first quarter. This may be related to the stock market and the real estate sector.

In the second quarter the value of the stock market is increasing rapidly, which helps increase profits of financial institutes. After the new mortgage policy, sales in the real estate sector rebounded significantly, and this helps the growth of the tertiary industry.

The second industry growth rate is only 6.1 percent, which is another lower level compared with the first quarter, suggesting that traditional industry is still facing structural adjustment.

As to the structural contributions of investment, consumption and export, the National Bureau of Statistics released only the contribution of consumer spending. The annual total consumer spending is about 60 percent. Compared with the second quarter of last year, the ratio is up 5.6 percent, about 4.2 percentage points contributing to the ultimate growth rate of GDP.

According to data on imports and exports in the first half, we can infer that the contribution of net exports to GDP has also improved. So we may conclude that the demand of domestic and foreign is the main driving force of GDP growth.

Although the real estate industry as well as traditional manufacturing industry has caused some drag on GDP, the government's timely introduction of the "steady growth" stimulus also played a proper cushioning effect.

But there are some worries.

First, relatively ample liquidity has caused a prosperous capital market, but the money has hardly flowed into the real economy. However, the use of leverage causes bubbles and as the deleverage process goes on in the second half of the year the positive effect to the tertiary industry cannot be so strong.

Second, in order to remove the hidden danger of a possible burst of the real estate bubble, the sector can hardly go on to be the main driver of GDP growth.

Third, the traditional pattern of economic growth is to motivate private funds by tax and bank saving into government investment, but with the decrease of investment effectiveness and the need of removal of excess capacity, the decrease of investment can drag on economic growth for quite a long time.

In short, the economy still suffers impact from negative factors such as the removal of product capacity of the manufacturing sector and weakening of real estate, we also note that there are some short-term positive changes, such as stabilized real estate sales and warmer consumption.

Looking forward, although we do not deny that the current economy still has somedownward pressure, there are reasons for optimism:

First, the government on many occasions stresses a steady growth and many executivesset the tone for the whole year's GDP growth rate of around 7 percent. Since last year,China's leaders are in line with the previous "new normal" statement and stressing"bottom line thinking", to ensure that the economy does not suffer systemic risk, but alsogive full consideration to employment needs. Taking into account the government'sfinancial strength and strong executive power, the economy will maintain steady growth.The debt exchange, the promotion of PPP in infrastructure and other stabilizationmeasures will make investment at an acceptable level.

Secondly, with new mortgage policy, repeatedly cutting interest rates and decreasing bankdeposit reserve ratios, domestic real estate sales will show signs of recovery in the shortrun.

Finally, the exchange rate is an important factor affecting external demand, but over thepast few months the factor is gradually improving. Although external demand uncertaintyremains strong, exports in 2015 will remain high.

It is worth noting that since the end of June the stock market fell sharply, which may affectconsumption, especially real estate sales. As the government takes action to save the stockmarket, the market is temporarily stabilized and likely to continue to rise. But theuncertainty remains.

China hopes to develop a sound multi-level capital market, but on a global scale successstories are scarce. It is easy to encourage people to launch a start-up, but it needs time tostart a business. Bubbles can be created in a short time, but companies need to grow over arelatively long period.

The government needs to focus on building market rules, which requires patience.Meanwhile, to maintain stable economic growth may be important to avoid systematic risk,but excessive administrative intervention delayed restructuring of the economy. How tobalance two sides of administrative intervention requires skills.

"Second, in order to remove the hidden danger of a possible burst of the real estate bubble, the sector can hardly go on to be the main driver of GDP growth."

This is very true. In North America, in Canada, the government cannot raise interest rate because a small % increase will cause a bubble. In Canada, the rates are dropping. How low can it go?? A 5 year closed mortgage is 2.69% here but will drop a bit next month. That is why house prices are very expensive. If you have been working for a few years and happen to be the 1-5% who make 100k/year or more, you will have a very hard time buying your first detached house in Toronto and Vancouver with prices $1m +.

China can look into our real estate industry and stay away from what we have. Most of the middle class are "house rich, cash poor" Most if not all of the money for most people are tied up in real estate.

 

[Beidou2020]

7% growth to a $10 trillion economy is absolutely superb. China is a very large economy. The larger the economy, the more difficult it is to grow fast. China growing 7% is very impressive. Even 5% growth for China would be considered impressive considering the base its growing from.

Chinese fiscal revenue is also growing around that 7% figure. Fiscal revenue is what really matters since more money for the government means you can spend more on things like military, education, healthcare, infrastructure, etc without going into unsustainable deficits.

 

[TaiShang]

China statistics chief upbeat about future economy
2015-7-17 11:19:00

Wang Baoan, director of the National Bureau of Statistics (NBS), said he has confidence in the Chinese economy, following a better-than-expected GDP growth in the second quarter.

Wang made the remarks in an interview with People's Daily, which will run the full text on Friday.

NBS data showed on Wednesday that China's second-quarter GDP expanded 7 percent year on year, unchanged from the first quarter, beating a median market forecast of 6.9 percent.

"The economy has shown signs of stabilization and recovery," said Wang, citing rosy figures about GDP, employment, inflation, agricultural production and income.

In his view, the country's economic structure and the quality of growth are both improving. The drive of mass entrepreneurship and innovation and repeated cuts to red tape are unleashing creativity and market vitality.

The NBS chief attributed the better-than-expected result to the unremitting efforts made by China's central authorities to strengthen and improve macro economic management.

Government policies to stabilize growth, boost reforms and restructuring, improve livelihoods and prevent risks have played significant roles for the economy, according to Wang.

"We believe the upward trend will continue into the second half of 2015 and we have confidence that China can deliver the economic and social development targets set for the whole year," said Wang.

China has a huge market with great potential and high resilience. Industrialization and urbanization will generate large room for future growth, Wang told the newspaper.

Pro-growth measures, including fiscal and monetary policies, will further take effect in the latter half of the year.

Regional integration campaigns, including the Belt and Road initiative,the coordinated development of Beijing, Tianjin and Hebei, the Yangtze River Economic Belt, will also serve as new growth engines.


However, Wang also noted that a slow recovery of the global economy and domestic problems from the economic restructuring will add uncertainties to the Chinese economy.

"Stabilizing overall demand is key to stabilizing growth. To that end,it is pivotal for China to increase investment," said Wang.

"But in the long run, we must rely on technological innovation," he said, adding that the government will focus its efforts on four things: lifting price controls, clearing market entry obstacles, liberalizing scientific research, and invigorating state-owned firms.

 

[cirr]

China statistics chief upbeat about future economy
2015-7-17 11:19:00

Wang Baoan, director of the National Bureau of Statistics (NBS), said he has confidence in the Chinese economy, following a better-than-expected GDP growth in the second quarter.

Wang made the remarks in an interview with People's Daily, which will run the full text on Friday.

NBS data showed on Wednesday that China's second-quarter GDP expanded 7 percent year on year, unchanged from the first quarter, beating a median market forecast of 6.9 percent.

"The economy has shown signs of stabilization and recovery," said Wang, citing rosy figures about GDP, employment, inflation, agricultural production and income.

In his view, the country's economic structure and the quality of growth are both improving. The drive of mass entrepreneurship and innovation and repeated cuts to red tape are unleashing creativity and market vitality.

The NBS chief attributed the better-than-expected result to the unremitting efforts made by China's central authorities to strengthen and improve macro economic management.

Government policies to stabilize growth, boost reforms and restructuring, improve livelihoods and prevent risks have played significant roles for the economy, according to Wang.

"We believe the upward trend will continue into the second half of 2015 and we have confidence that China can deliver the economic and social development targets set for the whole year," said Wang.

China has a huge market with great potential and high resilience. Industrialization and urbanization will generate large room for future growth, Wang told the newspaper.

Pro-growth measures, including fiscal and monetary policies, will further take effect in the latter half of the year.

Regional integration campaigns, including the Belt and Road initiative,the coordinated development of Beijing, Tianjin and Hebei, the Yangtze River Economic Belt, will also serve as new growth engines.


However, Wang also noted that a slow recovery of the global economy and domestic problems from the economic restructuring will add uncertainties to the Chinese economy.

"Stabilizing overall demand is key to stabilizing growth. To that end,it is pivotal for China to increase investment," said Wang.

"But in the long run, we must rely on technological innovation," he said, adding that the government will focus its efforts on four things: lifting price controls, clearing market entry obstacles, liberalizing scientific research, and invigorating state-owned firms.

I want to see GDP reported in SNA 2008。

There was not even a mention of the dreaded phrase “SNA 2008” in the whole interview。

 

[cnleio]

Thanks GOD, China Economy won't collaspe in 2015. Those anti-China trollers need wait for 2016 ...

 

[TaiShang]

Thanks GOD, China Economy won't collaspe in 2015. Those anti-China trollers need wait for 2016 ...

China collapse theory is one of the few academic fields that one can easily get away with failure. Alas, one is even rewarded fro failure.