Asia | China | Economics & Growth | Emerging Markets
China’s GDP data release always generates great market excitement despite rarely straying more than 25bp below or above the government target. This stability has led a number of analysts to propose their own measures, typically based on a variety of Chinese proxy data but, in the end, not that different from the official numbers. In this article I argue that, based on the performance of countries comparable to China, the latter’s GDP growth could be as low as half the official number and that markets are likely overestimating China’s importance for the global economy. That being said, China has one of the highest levels of corporate debt in the world and slower growth implies greater risks of financial instability.
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The real bottom line is wages: China’s have doubled every decade for 40 years and are on track to do so again, while America’s have not budged.
Yet no-one (except John Williams at Shadowstats.com) questions American growth figures.
Why?
This is one of the points of the article. If China has massaged the GDP numbers, it probably has done to other figures as well, including the average wage numbers. By proxy numbers, it is easy to see that China is not growing at 6%+ anymore
Don’t look as share of overall exports but rather the share of high end goods exports for a read on productivity…The low end stuff moved out of China sometime ago. Also should rather look at growth of unit labor cost to try to say that wage growth did not keep up with productivity.