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China’s economy stronger than the official data show: CBB

China’s economy stronger than the official data show: CBB


The picture of China’s economy slowing in the second quarter is misleading, or even inaccurate, with retail sales and investment actually stronger than the official data show, according to the China Beige Book.

    中国褐皮书(China Beige Book)指出,中国经济第二季度放缓的图片存在误导性,甚至可以说是不准确的,实际上,零售销售额和投资比官方数据显示的更强势。

“The retail sector may be seeing a turn higher, with profit and investment growth improving,” CBB said in a report, adding that slowing seen in official data in May reflects not the current situation but weakness seen earlier this year and late last year. “The sector may already be emerging from the troubles Beijing is just now introducing publicly.”


Similarly for investment, official statistics are lacking as they undercount retail spending, according to the private survey by CBB International, which collects anecdotal accounts similar to those in the Federal Reserve’s Beige Book. Including this shows capital spending is very healthy in most sectors, the report said, noting that official fixed-asset investment “reflects only part of the story — panning the camera to a wider angle shows strong capex in multiple sectors.”

    中国褐皮书国际(CBB International)类似与美联储褐皮书,专门搜集一些统计轶事,据其私家调查显示,投资也是类似的情况,由于官方数据少算了零售支出,所以官方数据是有缺失的。报告指出,这表明大部分行业的资本支出非常健康,官方固定资产投资“只反映出整个事件的一部分——从更广的角度看,多个行业的资本支出表现强劲。”

The picture of China’s economy slowing just as the trade war with the U.S. heats up has prompted growing concern, with stocks falling and the central bank stepping in this week to boost credit to smaller companies and help firms deal with debt. Analysts expect the bank to further ease policy to help cope with slowing growth and offset the effects of a crackdown on shadow banking.


However, while non-bank “shadow” institutions are being squeezed for money, the Beige Book reports that companies are still borrowing heavily, and interest rates have fallen, which should lower repayment costs. Corporate borrowing was higher when compared to both the first quarter and the same period in 2017, according to the report, while “interest rates fell nationally to lower than a year ago in every major sub-sector,” it said.


One area of concern was manufacturing, with the report noting that “a trade conflict with the U.S. would hit what is already metastasizing into a sore spot for the Chinese economy.” The immediate problem is that manufacturing and commodities export orders in the quarter showed considerable weakness, and the outlook is worse, the report said.


Notably, the situation for steel deteriorated. “The share of steel firms reporting improved conditions fell hard in every major category, from revenue and profit growth to output, investment, and hiring,” CBB said. “After nine quarters of record profit-making, and expanding production to take advantage of it, steel may be nearing a turn.”

    尤其钢铁行业的形势也恶化了。 “钢铁企业的份额在每个主要类别都下降得厉害,从收入和利润增长到产出、投资和招聘。” 中国褐皮书(CBB)指出,“经过几个季度的盈利记录,扩大生产并利用这一优势,钢铁业可能也临近转折点了。”

[ Editor: Zhang Zhou ]