A worker checks the production in the packaging section of the newly opened Lego factory in Jiaxing, Zhejiang Province, Кытай, on Nov. 24, 2016. (JOHANNES EISELE/AFP/Getty Images)A worker checks the production in the packaging section of the newly opened Lego factory in Jiaxing, Zhejiang Province, Кытай, on Nov. 24, 2016. (JOHANNES EISELE/AFP/Getty Images)

The Chinese economy is strange in many ways. Not only is it a hybrid between private capital and state control, but very few people directly invest in the mainland — and yet everybody is interested in how the second largest economy in the world is going to develop.

That’s because Chinese demand determines the prices of world commodities, and the operations of multinational companies in China impact earnings. When the yuan falls, markets across the world get jittery.

China watchers accept the fact that official Chinese data is severely flawed, and often simply fabricated, yet they still use it to analyze the Chinese economy and markets because there are few alternatives.

One alternative, Бирок,, is the China Beige Book International (CBB), a research service that interviews thousands of companies and hundreds of bankers on the ground in China each quarter. They collect data and perform in-depth interviews with Chinese executives.

Leland Miller, president of China Beige Book International.

Leland Miller, president of China Beige Book International.

Leland Miller, the founder of CBB, spoke with The Epoch Times about which investors and companies are interested in China, the latest developments in the currency, U.S.-China relations, overcapacity problems, and the One Belt One Road Initiative.

The Epoch Times: Who are the investors and companies interested in China and your services?

Leland Miller: There’s people who play the share roulette or people who have a specific company in mind. We see a lot of this in the retail space and they want to get more information from us. They invest in something where they think there is this untapped market either in China or as China goes abroad.

You’ve got macro firms who may not care about the day-to-day in China but want to make sure they understand the dynamics of China demand, of China credit, of China currency, so that they don’t get caught out.

Commodities are in incredibly high demand. We spend a lot of our time dealing with commodities firms now because we have all this data that’s not typically available. Things like net capacity, and a lot of firms have said, “Well, we have no way of checking government numbers…. If they say they’re cutting capacity, we have to believe them.” Well, we don’t believe them, we do it ourselves and what we found is that the opposite is happening across commodities, across time.

So you have all these different types of firms, but I think there is one uniting factor: whether they’re doing China micro, they’re doing China macro, or some niche element of the economy. If they don’t get China right, there are going to be repercussions in their portfolio.

So even people now who have absolutely nothing to do with China are clients of ours because as they keep abreast of what’s going on, they need to understand this and not get knocked from the side off their feet when they weren’t expecting it.

An increasing share of our clients are people who just want to understand China at the 30,000-feet level. Our early clients are people who want to understand at the 30-feet level. And we have everything in between, but also the corporates. The corporates have a very different mind-set: they need to know different things than, say, a hedge fund or other asset manager, who is simply trying to find a good trade.

The Epoch Times: How do you see the Chinese currency developing?

Mr. Miller: They took a very risky strategy on the currency dating back to last fall, and it worked. But it didn’t have to work and it may not have worked, and I think it’s worth looking back at this chronology because this could have been a very different year had some of this not worked out. Back in September 2016, the Chinese started to understand that there was a very real chance that the Federal Reserve (Fed) was going to hike in December, and they needed to prepare the currency and prepare themselves for a rate hike.

They started doing that and they weakened the currency. And then when President Trump was elected, they said, “Okay, well, we got to do this even more. We have to weaken right up until he gets elected so that we can come back and say we’re going to strengthen it once he gets elected.” Now it’s a very cynical strategy that happened to work, but what’s interesting is that there was an enormous amount of commentary late in 2016, early 2017, about how — and we see this all the time — now that China is pegged to a basket, it’s not pegged to the dollar, and that the Chinese have made this move.

That is just not correct. They had not switched, there has not been this back-and-forth. The yuan is essentially pegged to the dollar. The seven handle on this, the seven yuan to the dollar is extremely important for a lot of reasons, most importantly the politics around this, the politics with Congress, the politics with Trump, the politics with the Chinese leadership.

And the idea of them creeping closer and closer to 7 was a real major problem. They understood that this was a politically charged number and they got real close to it and they timed it well and they backed off it, and it had been strengthening ever since which has been supported by the fact that the dollar has been in a weakening trend.

But the interesting thing here is they figured out, “We’re going to give Trump little rationale for letting him say we are a currency manipulator. But right up until that point, we’re going to keep weakening, and we’re going to hope that nothing bad happens.”

Shockingly, they got up to 6.9 — it was approaching a danger point where I think markets would have started caring, and they backed off at the right time. So they have had the 2017 best case scenario, they haven’t had these interruptions, they haven’t had a super strong dollar that a lot of people thought was going to happen six months ago.

So the yuan is not on the top of people’s worry list right now but it’s just a matter of time before they have to deal with these dynamics again, unless the dollar is in a long term weakening trend.

The Epoch Times: How do you see U.S.-China relations in the future?

Mr. Miller: The administration understood that China’s a radioactive word if you use it politically, so we’re going to fight back on China, we’re going to save American workers from the tyranny of Chinese goods. That was the calling card for a while. And then of course President Xi and President Trump met at Mar-a-Lago and had this beautiful chat and everything turned around.

President Trump was convinced to give the Chinese some amount of time to fix the trade problem and fix North Korea and a whole bunch of other things. A lot of really smart China watchers have been saying recently that the President is angry that the Chinese have not done what he wanted them to do on the trade side of North Korea and he’s flipped and you’re about to see the repercussions.

I would actually push back against that. I think that what you’re seeing right now is a gradual dissatisfaction with this. But the real tea leaf here will be the South China Sea. АКШ. position in the South China Sea has just been invisible for the most part. I mean, they talk about a few spy ops but they have been mostly invisible for the past six, seven months.

And when the President, the White House, the administration makes this turn and decides: “Alright, China is not going to help us out, we now need a stick and we need a big stick,” you’re going to start seeing developments in the South China Sea. The fact that there has been some push back on trade, the fact that we’re talking a little bit about steel, it’s totally misunderstood.

The steel measures being talked about are not anti-China, although they’ll be sold as that. So I think we need to stop jumping the gun on the idea that the president has turned hostile on China. This hasn’t happened. Do we think it will happen? Yes. I think it’s a 2018 thing. But I don’t think that there has been a major shift in policy.

Chinese blacksmiths at a steel furnace in Nuanquan, Кытай, on Feb. 23, 2015. A booming property sector and monetary stimulus provided support for battered steel companies in 2017. (PHOTO BY GETTY IMAGES)

Chinese blacksmiths at a steel furnace in Nuanquan, Кытай, on Feb. 23, 2015. A booming property sector and monetary stimulus provided support for battered steel companies in 2017. (PHOTO BY GETTY IMAGES)

The Epoch Times: Are the Chinese really tackling the overcapacity problem?

Mr. Miller: There are two stories here. The first is what our data is saying and the second is the mistake I think a lot of investors make in seeing commodities as monolithic in China.

People usually think that they’re either going to cut capacity across the board or they’re not going to cut capacity at all. So what we have been seeing is not cutting capacity. When prices have gone up, a lot of investors said, “Look, the Chinese government is making good on their pledges to cut capacity. Look at prices are going up, imports are going up.” Anecdotally, that suggests they’re cutting capacity.

Now, they are cutting gross capacity, but total capacity added has gone up every quarter and it’s gone up in almost every sub-sector every quarter. They are adding capacity, and this is very intuitive if you think about it. There are all these industries who used to laugh about the economic reports we used to get from these firms quarter after quarter after quarter of higher inventories, worse revenue, no profits, more capacity — it was just a joke.

Now all of a sudden they’re getting this good economic scenario and they are not about to cut back. It makes sense that they’re not cutting back, but the narrative on this is that the Chinese government is hard at work cutting capacity, and it’s totally a mistaken narrative. Now, we tracked this very closely across coal, aluminium, steel, and copper, and there is a very clear dynamic there and it’s been clear for the last year plus. They are not cutting net capacity.

Now the other issue here is the differences between sub-sectors. When you look at coal and when you look at steel, there’s a different long term concern about the two of them. With all these Chinese commodities, there’s potential overcapacity issues, but coal kills people and coal turns people’s lungs black.

China Beige Book International (CBB) is an independent research firm that collects data from thousands of Chinese firms every quarter, including in-depth interviews with local executives. Although the CBB does not give definitive growth numbers, it logs how many companies increased their revenues, how many laid off workers, and many more datapoints.

China Beige Book International (CBB) is an independent research firm that collects data from thousands of Chinese firms every quarter, including in-depth interviews with local executives. Although the CBB does not give definitive growth numbers, it logs how many companies increased their revenues, how many laid off workers, and many more datapoints.

And so the idea that the Chinese can continue to crank out coal the same way they can crank out steel, with the same repercussions, it’s not there. So over time I think we will see a pullback on the coal side. It’s an open question as to whether we’ll see it in steel and aluminum; a lot of this might be affected by the trade actions coming out of the United States, but right now the major story here is that investors are guessing.

They’re guessing based on prices and they’re getting this wrong more often than not. They don’t understand the degree to which these sub-sectors are cutting back. In fact, they increasing capacity, they’re bringing more capacity online. They take the old ones and take them offline or the ones that aren’t being used, but they’ll activate others or they’ll build others or they’ll upgrade others. So the overall dynamic is that more capacity is being brought online but then make a very big show of what they take offline or what they blow up.

They used to put TNT into giant iron plants and blow them up to show that the government was doing something. This is the equivalent of this in 2017. But net net, they’re not cutting back right now. They’re trying to take advantage of a good market for their goods and so this is going to shock people. It’s already surprised people; that’s why you see these enormous 5 percent, 8 percent moves in a day on these commodity markets. But it’s going to shock people more going forward when they understand the totality of what has happened over the past year.

The Epoch Times: What are your thoughts on the One Belt One Road (OBOR) initiative?

Mr. Miller: What is the real goal for this? The goal is to exert Chinese influence abroad, it’s to recycle surpluses in goods and services abroad to some degree because of oversupply. It will accomplish certain things but is it a worthwhile project? Is it going to do what everyone thinks it’s going to do? No, of course not.

But there are things being done. It is a project large in scope, it will attract headlines for many years, but at the end of the day is this a game changer for China? No. Have the Chinese ever in any context found a sustainable ability to get returns, to get an actual return on their investment? No. And they’re going into a situation where they’re irritating a lot of these states who think that they were going to be able to use their own labor, but the Chinese are using Chinese firms who are doing quite well so far, and having them do the labor.

There are political problems that brings up. They also have a different situation right now than they did three years ago when you talk about the Forex reserves in the capital accounts. So the idea that they had too much and had to figure out ways of dumping Chinese capital in other places, that problem has reversed itself. Now we are not at any kind of problematic point at around $3 trillion, people have the opposite concerns. I think that if this were not a President Xi initiative that he has attached his name to, this would have been deescalated far more dramatically.

They’re going to have to build it up, it still plays a role, it’s still worth watching, but the idea that this is a real game changer similar to the Asian Infrastructure and Investment Bank which was a political upheaval about a year ago, two years ago, whenever it was, these are not game changers. These are Chinese inefficiencies at work abroad.

Interview edited for brevity and clarity

Twitter: @vxschmid

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Every economy has themes. For the Chinese economy, the only theme up until recently was rapid growth. First because of exports, then because of investment in infrastructure and factories.
The Chinese economy of 2016 has many different themes. One theme is an unprecedented economic slowdown, reflected in official numbers and much worse in unofficial estimates. But then there is the theme of rebalancing. The old economy of manufacturing, investment, and exports is slowing down but the new consumer and services led economy is supposed to take over the baton.
With official sector data notoriously unreliable, China analysts get conflicting messages and don’t know which theme is actually happening. To shed light on this murky situation, Leland Miller and his team at the China Beige Book (CBB) interview thousands of companies and hundreds of bankers in China each quarter to get an accurate gauge of the themes prevailing in the Chinese economy.
Led by rising layoffs at private firms, first quarter job growth took another notable hit.China Beige Book

CBB collects data from thousands of Chinese firms every quarter including some in-depth interviews with local executives. Although the CBB does not give definitive growth numbers, it logs how many companies increased their revenues or how many laid off workers, for example.
Labor Weakness
The most interesting finding of this quarter’s report is that the labor market is finally reflecting the weakness in the general economy. This hasn’t been the case throughout the slow-down, which started in the second quarter of 2014 according to the CBB data.
“Led by rising layoffs at private firms, first quarter job growth took another notable hit, sliding to a new four-year low. Expectations of future hiring have also taken a dive,” states the report. Only 23 percent of respondents said they were hiring, with 15 percent of companies said they are firing. China has announced it will lay off millions in the moribund steel and coal sectors of State Owned Enterprises (SOE). Бирок,, the CBB survey indicates it was mostly private companies which didn’t want to hire more workers.
Only 28 percent of the companies said they will hire in the near future. Another interesting development is the slowing growth in the country’s supply of skilled and unskilled labor. The constant flow of rural workers to the cities dramatically increased productivity over the last 20 years and provided China with a low-cost labor advantage. Бирок,, many analysts now estimate that the Lewis Turning Point has been reached and China’s working age population is declining. The CBB report confirms this thesis, as only 33 percent and 24 percent of the companies reported growth in skilled and unskilled labor.
The good news: Profit growth stabilized overall and didn’t further deteriorate compared to last quarter, although the report notes this may be due to cost cutting and layoffs.
Old Economy
Capital expenditure increased at only 33 percent of companies, a record low in the 5-year history of the CBB. Again it was private companies leading the way here, whereas SOEs tried to budge the trend. Another part of the old economymanufacturingcontinues to deteriorate, especially when compared to the first quarter of last year. Only 42 percent of companies reported revenue gains, which technically means the sector is in recession.
Collectively, our data show that that firms first stopped borrowing, then cut spending, and now are becoming allergic to hiring. — China Beige Book

Most notable here is the textile sector, which has lost competitiveness due to higher wages. As a consequence, multinational companies relocate their production elsewhere in Asia or even back to the United States. The number of companies reporting gains crashed by 31 percentage points to only 24 percent compared to last year.
The last part of the old economy, the manufacturing export sector, is also very weak, with only 27 percent of companies reporting revenue gains.
The CBB cautions that any kind of monetary easing, like the Reserve Requirement Ratio cut earlier this year, is not having its intended effect. Only 16 percent of companies say they are borrowing money. Again, contrary to the People’s Bank of China’s (PBOC) easing effort, interest rates at banks and shadow lenders increased, presenting an interesting paradox. The central bank eases credit conditions, firms do not wish to borrow, and yet interest rates are on the rise. Unfortunately, the CBB doesn’t explain this phenomenon but succinctly summarizes the current state of affairs like this
“Collectively, our data show that that firms first stopped borrowing, then cut spending, and now are becoming allergic to hiring.
The PBOC has been cutting reserve requirements but the CBB days it didn’t help much (Natixis)
So what about the new economy? Services, consumption, чекене?
“Revenue growth in retail and services each slowed again in the first quarter, a rebuke to those analysts who optimistically repeat the mantra of ‘two-tiered economyin lieu of compiling relevant data.So no, at least for now, even though e-commerce companies reported gains.
The worst performers in retail were textile and furniture and appliances. The China watchers who speculated the home furnishing section would take a hit because of a slowdown in property were right.
Services presented a mixed picture, with 47 percent of firms saying their revenues increased, which is down from 48 percent compared to a year ago and not enough to take over from the old economy.
Within the service sector, China shows a remarkable similarity to the United States: The strongest subsector was healthcare.
As for the property market, residential is still under pressure but commercial property showed a rebound compared to the last quarter.
“Talk of a property rebound was also accurate only on the surface, in light of sharp differences by city size, region, and commercial (soaring) or residential (plunging) orientation,” the report states.
With respect to the official data rebound in prices and record volumes of used homes transacted in residential real-estate, the CBB survey poses more questions than it answers. Or maybe we should just trust the data on the ground and not the officially reported ones, as Andrew Kollier of Orient Capital pointed out: “I don’t trust the official figures of a rebound because

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The official data doesn’t look that badthis is normal in China. Bad loans are only about 1.6 percent in total, compared to 1.18 percent in the United States. But then, the questions start: What is the real number?
The answer can only be higher, a lot higher. Investment bank CLSA estimates it could be as high as 8.1 percent for all bank loans. Compare this to bad loans in the United States of about 3 percent at the height of the financial crisis.
(St. Louis Fed)
Chinese banks carry assets of $30 trillion of which up to $21 trillion could be loans. In other words, banks could be sitting on as much as $1.7 trillion of bad debt.
Of course, it wouldn’t be China if the state did not invent different ways to conceal the real figure, come up with a doctored one of 1.5 percent and pretends nothing bad is happening. It would not be China if the whole process would not look like a Ponzi scheme. And it wouldn’t be China if Alibaba’s trading platform Taobao would not be involved.
China has experience in managing a banking crisis. It restructured as much as 50 percent of loans and offloaded them onto state-funded “Asset Management Companies” (AMC) at the turn of millennium.
“They rolled over the bad bank debts from 15 years ago, they are still there, believe it or not. When you keep rolling you get to the stage where they are now a much smaller portion of the economy. So in that sense they have succeeded, they have grown their way out of the problem,” says Fraser Howie, author of “Red Capitalism,” one of the first publications to spell out China’s debt problem in 2011.
(Royal Bank of Scotland)
China is doing the same thing again in 2015, so far avoiding a restructuring of the state-owned banks and keeping the official bad loan ratio low.
But this time the AMCs can’t just hold onto the bad debt and wait until it disappears in the ocean of a larger economy, because debt is growing faster than GDP. So they have to sell it on Taobao.
According to local media, China Huarong Asset Management Co., Ltd. plans to list 51.5 billion yuan ($8 миллиард) worth of bad loans on Taobao.
“AMCs in general will more frequently resort to a ‘wholesaling modelfor distressed asset disposal (i.e. a quick sale of acquired non-performing loans to other parties, thereby earning slimmer margins as opposed to gains on asset value appreciation), given the increasing non-performing loan supply in the current credit cycle,” writes Barclays in a note.
China Cinda Asset Management Co. Ltd sold as much as 4 billion yuan ($620 million) of bad loans on Taobao since May this year.
Normally the AMCs would just wait and see whether the underlying assets would return to profitability and directly sell those assets. This only works in a growing economy, Бирок,.
“Rates have been falling for a number of quarters and yet the share of firms borrowing has been dropping despite that. Capital expenditure is falling,” says Leland Miller, president of research firm China Beige Book.
The fact AMCs have to auction off bad loans wholesale means there are just too many of them around and they don’t see much hope for economic improvement.
Barclays also has interesting estimates regarding the credit quality of the loans AMCs buy from the estimated pool of $1.7 trillion of bad debt. It believes AMCs buy the assets for a maximum of 30 percent of book value.
Under these assumptions this would leave banks with a total loss of $1.2 trillion. But in China, when everything is said and done, this number could be far higher.

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This year, the Chinese economy hit a rough patch. Whether it is official data, bank research data, foreign exchange markets, or commodity prices, they all paint the same picture.
Many economists predicted this slowdown, but there was one researcher who knew it first. Leland Miller of the China Beige Book operates the most comprehensive system of real-time business surveys in China and claims to have the most reliable and timely data.
Each quarter, his researchers contact thousands of businesses across the country and interview high-level executives to find out what the economy looks like from the ground.
Modeled after the Federal Reserve Beige Book, Miller and his team replicated this approach in Chinawith stunning results.
Epoch Times spoke to Mr. Miller after CBB published a particularly worrisome report for the fourth quarter.
They are realizing there is going to be pain.

доору Times: Your fourth quarter, on the ground report on the Chinese economy was pretty bad. Why did this surprise you?
Leland Miller: It has been a long term slowdown. It was something that read out very clearly in the data across quarters and years.
But before this quarter, over the summer, the markets went from optimistic to becoming bearish in a short time. It was the mismanagement of the stock market and people were wondering whether this meant the incompetence in running the stock market would spill over: If these are the same people running the economy, why won’t we see similar problems elsewhere?
The second thing was the currency devaluation, which was justified considering what was going on with other currencies. But it wasn’t communicated very well and investors were left wondering whether this was part of a bigger thingmaybe the start of currency wars, or clandestine stimulus policy through other means. Investors didn’t understand what was happening.
The third strike was the weak manufacturing datalow manufacturing indicators, very low official data for manufacturing. China Beige Book manufacturing data was very weak as well.
Chinese workers prepare stuffed toys at a factory on September 17, 2015 in Zhejiang, Кытай. The China Beige Book surveys thousands of small and large businesses in China.  (Kevin Frayer/Getty Images)
The combination of these three things got people nervous and caused a market sell off based on the mistaken notion that China had become fragile over night and was about to blow up.
So we have been saying, there are problems, let’s track them, but the system is not crashing now.
In the third quarter, we had the modest slow down continue, but it was not a crisis and the data looked similar to the type we had been seeing for two years. No question there was a slowdown, but the third quarter wasn’t markedly different from what we had been seeing before.
The new data shows significant deterioration that wasn’t there over the summer when everybody got scared. We saw significant weakness in revenues and profits, which had been relatively strong for the last couple of years despite the economy’s deceleration. What made this drop in profits more concerning was that the two hidden sources of strength looked shaky in Q4 as well.
доору Times: You are talking about the price level and the labor market?
Mr. Miller: The inflation pictureit looks like for the first time it could have been harmful deflation. We have not been tracking deflation broadly, but this time it starts to look like disinflation has become deflation for some firms.
If you don’t have firms interested in borrowing and spending, you will have a hard time enacting a stimulus program.

And the labor market, we have been talking about the surprising stability of the labor market despite the economy slowing down. Analysts mistakenly assume the economy is slowing down, so the labor market has been weakening. That wasn’t the case. But in Q4, it’s worrisome, a lot of metrics went down, from job growth to labor supply. Wage growth also slowed.
Now, this is one quarter, it’s not yet a trend. But the data are interesting and different enough to raise at least a yellow flag right now.
We thought the slowdown would change China dramatically over time, but it’s one that investors and the regime can manage. But the type of slowdown we saw this quarterif it continues in the futurethen this will be something very different and much more difficult to manage.
доору Times: What about China’s currency policy, monetary policy, fiscal policy?
Mr. Miller: We think the Chinese are not very likely to devalue the currency dramatically. Especially with the strong dollar, there will be some depreciation against the dollar. We think there is going to be depreciation, but they are not trying to do a one-off devaluation
For a long time, the people assumed the Chinese have monetary stimulus on the one hand and fiscal stimulus on the other hand. Rates have been falling for a number of quarters and yet the share of firms borrowing has been dropping despite that. Capital expenditure was falling.
You have to understand that the promises of 7 percent growth forever are part of a political narrative that don’t reflect reality.

If you don’t have firms interested in borrowing and spending, you will have a hard time enacting a stimulus program.
All the talk is about fiscal policy. But if you look at some of the sectors that are most relevant to the government trying to boost up stimulus, it’s transport and transport construction. Both of those sectors have had a dismal fourth quarter.
If this fiscal stimulus is happening, why aren’t those sectors improving. If you have the ammunition, were is the evidence it is actually working? We have shown for years monetary stimulus no longer works.
If this becomes a new normal, if the labor market is weakening, if sectors keep showing those downticks, will the Chinese decide to double down on stimulus even though they know it has limited use.
доору Times: Is the regime panicking?
Mr. Miller: I don’t think they are panicking. Trying to stage manage a slow down for years, the dynamics are changing and certain things scare them a bit, like what happened over the summer. They are trying to do it as painlessly

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Everybody knew it but it took a while to become official.
In the case of overstated Chinese GDP figures, we now got confirmation from the CCP’s mouthpiece Xinhua that they have been made up for a long period of time, at least on the regional level.
This is just short of the National Audit Office admitting GDP numbers are basically made up. Actually, according to a report by China Daily, the National Audit Office did just that as well, but didn’t release the report.  
The Chinese economy clearly is not growing at anything like 7 percent.Wilbur RossWL Ross & Co

“One county in Liaoning reported annual fiscal revenues 127 percent higher than the actual number,” writes China Daily.
Xinhua on on the other hand quoted an official saying: “If the past data had not been inflated, the current growth figures would not show such a precipitous fall.
According to China Daily local officials also manipulated investment figures and overstated them by at least 20 percent in the case of Heilongjiang province.
They just pretended even unsigned contracts where actual investments, whether real money followed or not.

“The official statistics have deep methodological problems; the departments are under-resourced. But what’s really the key here, is that the GDP number doesn’t really tell you much about growth across the economy,” says Leland Miller of China Beige Book, a research firm which interviews thousands of companies to keep tabs on growth and other metrics.
Well, according to official state media, a lot of that growth across the economy was made up, which is one of the reason why most investors and analysts also don’t believe the headline figure for the whole country.
“Right now they’ve got an economy which isn’t growing at the 7.0 percent, it’s more like 1 or 2 percent. In Beijing they’re even saying privately 2.2 percent,” says Gordon Chang, author of “The Coming Collapse of China.
GDP grew at 6.9 percent in the third quarter according to official figures.
Billionaire investor Wilbur Ross prefers to look at actual production and consumption datarather than official data as well:
“The Chinese economy clearly is not growing at anything like 7 percent. We have felt for a couple of years that those figures were very, very generous. If you look at physical indicatorselectricity consumption, natural gas consumption, oil consumption, cement consumption, steel consumption, telecom consumption, retails salesif you look at all those indicators, none of them were growing at a rate that was equal to 7 percent and neither were the exports.
So how fast is China’s GDP growing after all? Nobody knows for sure, but here are the six best estimates.

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