A great piece of research on China
The post was small but it makes the point that even pages of analysis would not make as effectively. It is worth reproducing in full:
Chinese Efficiency
China is becoming the world’s most energy-efficient economy.
Or maybe its statisticians are just the most creative.
In recent years, China’s reported economic growth tended to be a little lower than the increase in its electricity consumption. But that relation has completely turned around.
Following are the year-over-year increases in its gross domestic product and electricity consumption for first quarter of each year.
2002: Electricity up 9.4%, G.D.P. up 8%
2003: Electricity up 14.7%, G.D.P. up 10.3%
2004: Electricity up 16.7%, G.D.P. up 9.8%
2005: Electricity up 14.3%, G.D.P. up 9.9%
2006: Electricity up 13.4%, G.D.P. up 10.4%
2007: Electricity up 12.4%, G.D.P. up 11.7%
2008: Electricity up 16%, G.D.P. up 10.6%
Today China reported that its G.D.P. was up 6.1% year-over-year through the first quarter. It has not yet reported March electricity consumption, but during the first two months of the year electricity use was down 9.2% from 2008’s first quarter.
Based on the official G.D.P. numbers, China’s growth has slowed in the worldwide recession, but remains very impressive. The electricity data paints a different picture.
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My colleague calculated that y-o-y nominal GDP growth in China was around 3.6% and that means that the real GDP of 6.1% (y-o-y) was due to the GDP deflator contracting by 2.4% y-o-y. Further, he managed to extract q-o-q changes in both real and nominal GDP that he had re-constructed and found that China has had two consecutive quarters of nominal GDP contraction.
Of course, you would not have guessed them from all the upward revisions to China’s growth estimate for this year by many research houses – well, housed in banks
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