By Sam van de Schootbrugge 17-02-2021

What Is Driving Chinese Growth?

(5 min read)
Resize text:


For decades, many have questioned the accuracy and authenticity of Chinese official GDP figures. And a period of abnormally smooth and consistent growth in line with the decade-long real GDP target set in 2012 has only strengthened these concerns (Chart 1). Also, real GDP figures lost all normal fluctuations, complicating any analysis. But a recent BIS working paper exploits provincial macroeconomic data to reveal new insights into Chinese GDP growth. They find:

Provincial data, particularly on credit, inflation and investments, is a good method for tracking nominal GDP growth in China.
When looking at the determinants of Chinese growth over time, growth driven by the reallocation of labour has predominantly run its course.
Instead, domestic demand components, such as government expenditures, credit growth and house prices, have largely driven growth since 2010.
These new growth drivers are playing an increasingly prominent role across all provinces in China, helping to make growth more homogenous.

TO READ THIS DEEP DIVE
SUBSCRIBE TO MACRO HIVE PRIME

£39/month thereafter

For access to our Slack Chat Room, where we discuss all things markets with our researchers and subscribers

START YOUR FREE TRIAL


MOST READ

Successful Start-Ups Build Strong Founding Teams (4 min read)

By Sam van de Schootbrugge | Feb 10, 2021
Start-up success hinges on many factors, but most would agree that the skills and experience of the founder and initial founding...

Where Will the Economy Find 10 million Lost Jobs? (3 min read)

By John Tierney | Feb 08, 2021
The headline January labour market report was another downer – private payrolls rose a scant 6,000 versus the consensus...

Where Can you Get Higher Bond Yields?

By Caroline Grady | Dec 04, 2020
US yields are rising. The combination of growing optimism over a global recovery given vaccine progress, and the possibility of a US...

PREMIUM CONTENT

Which Countries Will Reach Covid-19 Herd Immunity in 2021? (3 min read)

By Sam van de Schootbrugge | Feb 19, 2021
Summary Vaccination rollouts are accelerating, and global…

Higher US Yields Are Good for Equities (1 min read)

By Bilal Hafeez | Feb 16, 2021
Many say that higher US bond yields…

Tesla Bitcoin Bombshell: The Trickle May Turn to a Flood (4 min read)

By John Butler | Feb 12, 2021
Summary US corporate cash piles continue to…

Want To Join Our Community Of Leading Investors And Researchers In Our Slack Chat Room?