China's economic outlook - Paradoxical Statistics
Since Beijing announced its 4 trillion yuan (US$585 million) stimulus plan, China’s banks have granted more loans in three months than in the whole year of 2008. Stocks soared in mainland China as well as in Hong Kong, and the real estate market flourished with a 30 to 40 percent increase in the first four months of 2009.
But while some economists have eagerly declared the recovery of the Chinese economy, others suggest that China is merely experiencing a brief surge that is bringing a problematic overexcitement to the market. Among these critics is finance professor Xu Xiaonian.
Paradoxical Statistics
The imbalance Xu mentioned is well reflected in the economic paradoxes discovered by Liu Yuanchun, Associate Dean of the School of Economics of People’s University in Beijing. Based on observations of this year’s economic statistics, Liu listed eight pairs of conflicting facts, including:
1. Sharp increase in investment vs. fast drop in export and import
2. Rising industrial added value vs. lower increase in electricity consumption
3. Fast industrial growth vs. slow financial growth
4. The increase in cargo transportation vs. the decrease in port throughput
5. The increase in nominal consumption vs. the decrease in actual consumption
6. The increase in stock index vs. the decrease in the profit of listed companies
7. The increase in industrial added value vs. the decrease in industrial profit
8. Increasing real estate sales volume vs. stagnant actual real estate investment
Liu says that such inconsistencies may be signs of bigger troubles, such as deepening deflation, rising unemployment, shrinking demand abroad, excessive real estate inventory and excessive production capacity. According to Liu, the current boom is just the forefront of a dire future.
Since Beijing announced its 4 trillion yuan (US$585 million) stimulus plan, China’s banks have granted more loans in three months than in the whole year of 2008. Stocks soared in mainland China as well as in Hong Kong, and the real estate market flourished with a 30 to 40 percent increase in the first four months of 2009.
But while some economists have eagerly declared the recovery of the Chinese economy, others suggest that China is merely experiencing a brief surge that is bringing a problematic overexcitement to the market. Among these critics is finance professor Xu Xiaonian.
Paradoxical Statistics
The imbalance Xu mentioned is well reflected in the economic paradoxes discovered by Liu Yuanchun, Associate Dean of the School of Economics of People’s University in Beijing. Based on observations of this year’s economic statistics, Liu listed eight pairs of conflicting facts, including:
1. Sharp increase in investment vs. fast drop in export and import
2. Rising industrial added value vs. lower increase in electricity consumption
3. Fast industrial growth vs. slow financial growth
4. The increase in cargo transportation vs. the decrease in port throughput
5. The increase in nominal consumption vs. the decrease in actual consumption
6. The increase in stock index vs. the decrease in the profit of listed companies
7. The increase in industrial added value vs. the decrease in industrial profit
8. Increasing real estate sales volume vs. stagnant actual real estate investment
Liu says that such inconsistencies may be signs of bigger troubles, such as deepening deflation, rising unemployment, shrinking demand abroad, excessive real estate inventory and excessive production capacity. According to Liu, the current boom is just the forefront of a dire future.
