Private data shows China GDP is solid but slowing
Analysts look to alternative data as Beijing tries to strike balance with reforms
Official acknowledgement in China of fraudulent government economic figures has some people placing even more emphasis on the importance of private data, as the country tests its resilience to wide-ranging reforms.
Alternative data is largley backing up, or even outperforming, government data, but may show signs of a slowdown.
“Private gauges constructed from high-frequency series, real activity indicators and big data provide an alternative read. In terms of level, they suggest that growth is solid — in line with or even ahead of the National Bureau of Statistics’ numbers,” a research note from Bloomberg said Wednesday morning.
“In terms of momentum, the picture is less positive, with most proxies showing a slowdown into end-2017.”
The note is light on the specifics, and at least one gauge shows the manufacturing sector was picking up steam at the end of last year.
Specifically, the SpaceKnow China Satellite Manufacturing Index, which utilizes satellite imagery of factory activity, showed last month that China’s manufacturing continues to expand at the highest pace in five years. The gauge is largely in line with official data:
Chinese officials have sent some mixed signals about exactly how they intend to strike a balance between reforms that will cool down the economy and the need to keep up a healthy pace of growth.
After some question last year regarding how much emphasis leaders will place on a GDP growth target, it was reported that the target for 2018 will be “around 6.5 percent,” unchanged from last year. Some see this as an indication that Beijing will continue to tread carefully as they continue deleveraging and state-owned enterprise reform efforts.