The Chinese economy has recently fallen out of favor with analysts and investors. Asia’s richest man Li Ka-shing has sold most of his assets in the country and some researchers think the GDP could crash by as much as 20 percent over the next five years.
Because of the uncertainty about growth and financial conditions in the world’s second largest economy—after all, most observers live abroad—it’s good to have someone who comes up with empiric evidence to tell us what’s really happening on the ground.
Leland Miller of the 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, the message about the third quarter of 2015 is this: It ain’t pretty but we are far from a total collapse.
“What’s most remarkable is how truly unremarkable the quarter was,” the CBB Q3 2015 report states.
According to CBB, the revenues of the firms questioned (the best proxy for GDP) was a bit weaker than during Q2, but better than Q1 and roughly stable over the year. “Those touting China’s sudden fragility are either exaggerating current problems or have entirely missed the slowdown of the past several years,” states the report. CBB had first noted a slow-down in economic activity in 2012.
