Official Chinese statistics show growth of 6.3% year-on-year in the second quarter. Maybe less?
Fernard Hsu & SpiegelChina Cyclical Activity Tracker (CCAT) shows slower growth than GDP reports:
figure 1: China’s official GDP growth, normalized and detrended (blue), CCAT (green) and imports (tan), expressed in standard deviation units. ECRI defines the peak-to-trough dates of recessions in gray. source: China CAT (August 2023 edition)ECRI.
Note that CCAT’s Q2 observations are different than usual, as the consumer series is only available until April.
The authors conclude:
The standard deviation of growth in China’s cyclical economic activity from trend over the past four quarters ending in Q2 2023 is -0.51.
To translate this into GDP growth, I ran a regression on CCAT’s year-on-year GDP growth (constant and trend) from 2019-2023. The regression adjR2 is 0.96. This produces the image below.
figure 2: China GDP growth year-on-year (blue) and fitted using China CAT (red). ECRI defines the peak-to-trough dates of recessions in gray. Source: National Bureau of Statistics, China CAT (August 2023)ECRI and authors’ calculations.
GDP growth in line with CCAT in the second quarter was 5.3%, not 6.3%.
The release of trade data for July added to concerns about the growth outlook. Both exports and imports (in nominal USD terms) fell more than expected (14.5% and 12.% Bloomberg consensus; and 12.4% and 5.0% consensus, respectively).
source: Reuters.
from Cash/Reuters:
The grim trade data reinforced expectations that economic activity may have slowed further in the third quarter, with construction, manufacturing and services activity, foreign direct investment and industrial profits all weakening.
Discuss the limitations of China’s statistical and economic analysis reports, here.
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