China’s economy is slowing. Profits at leading state-owned enterprises (SOEs) are stagnating. The mainland’s plodding, unsophisticated banks face an uncertain, troubled future. Many observers, including regulators and leading Communist Party officials, deem grey-market shadow finance to be out of control. How worried should we be?
The first issue first, as it informs so much of what happens across the People’s Republic. Generating hard topline facts on China’s economy has never been easy. Data provided by the official National Bureau of Statistics are trusted by almost nobody.
The agency once issued a GDP figure before the fiscal year was even complete. In the mid-2000s, in an attempt to make the Party appear to be in charge of a serenely growing economy, it understated GDP; now it probably embellishes it. Even premier Li Keqiang says he uses the NBS "for reference purposes only" – hardly a ringing endorsement.
For want of an accurate source, the NBS is all we have. Thus, officially at least, China’s economy will grow by 7.5% this year and at 7.4% in 2014.
Few non-mainland economists, having seen GDP slow from 7.9% in the final quarter of 2012 to 7.5%
