China is truly a black box.
For the past 15 years I’ve heard that China’s GDP numbers were off-kilter but the country has clearly produced some impressive results in construction, infrastructure, the environment and living standards.
That said, the mystery about GDP continues.
Bloomberg today cites Gao Shanwen, chief economist at SDIC Securities, who previously advised the country’s regulators and top officials but has been a critic of China for many years.
“We do not know the true number of China’s real growth figure and maybe some other numbers,” Gao said in Washington.
He speculated that growth over the past 2-3 years has been “around 2%” not the official number, which has been around 5%.
“If my speculation is correct, I think it might be more reasonable to expect a growth rate between 3%-4% in the years to come, the next three to five years, but we know the official number will always be around 5%.”
Gao has been in the media recently and has his WeChat account closed for similar comments. Those speeches and the coverage in the media was also censored.
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Ok, so let’s assume he’s right. What does China GDP accelerating to 4% imply? if that’s the case, it’s more marginal demand and demand growth than what was taking place in reality. Overall, it’s incredibly tough to make forecasts about global growth with China’s opacity.
Gao Shanwen