If You Only Look at China’s GDP, You Are Missing the Real Action

The regime manipulates GDP figures and even if they are accurate, there are more important things to focus on in the Chinese economy right now.

A Chinese worker waits for customers at a grocery store on January 20, 2015 in central Beijing, China. Kevin Frayer/Getty Images

Over the weekend of Oct. 17–18  the first good economic news in a long time came out of China: The country announced official growth figures of 6.9 percent annualized for the third quarter, narrowly beating expectations of 6.8 percent.

The bad news: This number is likely overstated by several percentage points. The caveat this time is a statistical adjustment, which uses falling prices to boost growth. Excluding this adjustment, the economy only grew 6.2 percent.

Even that is optimistic: Unofficial growth estimates range from 2 percent to 5 percent. The most reliable indicator, named after Chinese Premier Li Keqiang, blends railway cargo volume, electricity consumption, and new loan disbursement. It shows growth at around 3 percent.

The monthly change in the Credit Suisse Li Keqiang Index. Credit Suisse