Don’t Believe the Hype: Why Chinese Economic Reports are False
All the buzz now are the official numbers coming out of China. The economy is booming and will hit an astounding economic growth target of 8%. Its GDP growth spiked to 7.9% up from 6.1% in the first quarter. These last two quarters promise a possible even high growth rate. Of course in the global economy China is nearly the only one growing.
However, these figure are the “official” numbers out of China. Official figures don’t always tell the true story. Also an economic recovery there might be a double dip instead of a V shape. Everyone is reporting that there is a strong possibility that China’s economy will slip back down after their stimulus erodes. The official figures did not even include the private sector employed. That’s some 60% of the population not covered by official numbers.
China still needs to create 12 million new jobs and the stimulus did not offset the complete impact of the financial crisis.
Figures are also coming out that the stimulus was wasted by speculation: this is evidenced by stock price spikes and real estate explosions. Like America this is simply creating a bubble. When the smoke clears the banks will once again be sitting on a big bubble of bad debt, which is counter productive to bringing the economy forward.
What is known about the official figures is that that same 7.1% GDP growth included a staggering 6.2% state-directed investment. The second quarter saw no change. They are concerned that consumer spending will remain tight through the last two quarters and the state coffers will be emptied.
CNBC the Worst Source for News
These are the facts. The numbers are real. It’s people like Maria Bartiromo that report just completely false information that makes me angry. She reports China’s Economy is Booming. What is her learned conclusion? She reports that the stimulus package reached the common Chinese man. According to all my sources, the stimulus package there was virtually the same as it was here: it was given to the rich and higher ups. It never reached the common man at all. But she, like most on that horrible channel, didn’t bother to do any research or worse went with the official story.
If you actually listen to CNBC or worse, make your investment decisions based off of a t.v. program then you are the moron. I may blame CNBC for trying to come across as financial journalist, but I carry a bigger stick for boobs that listen to them [pun intended].