China’s economy runs out of gas

Today’s news on the Chinese economy – that growth has slowed for the sixth quarter running – is no big surprise: the question for months now has been whether China’s landing will be hard or soft, not whether there will be a landing. Indeed, some analysts feel that the numbers suggest a recovery in the second half, and both Asian and European markets are buoyed by apparent relief the data isn’t worse. 

Official Chinese statistics have to be taken with a large pinch of salt, obviously. Looking at the headline GDP numbers isn’t enough, as we pointed out recently – electricity consumption is probably a better gauge. But wait – there’s a further complication, because electricity may now be a poor proxy as well, after it emerged local officials may be urging businesses to pump up a whole range of economic indicators.  

As a proxy for the proxy, Standard Chartered recently suggested looking at oil.