Understanding China, One Blog at a Time

An American in China

Chinas Real GDP Growth

Posted by w_thames_the_d on April 14, 2012


BrewMan takes China to task with the reality of her GDP growth…Thanks Brew
From the BrewMan
“China has economic growth of 7.4% using the American annualised system (compounded) and should ease more

China’s economic growth

This did not turn out as hoped either. From the Chinese Bureau of Statistics

According to the preliminary estimation, the gross domestic product (GDP) of China in the first quarter of this year was 10,799.5 billion yuan, a year-on-year increase of 8.1 per cent

So not the 9% of the rumour and slightly lower than more sober estimates. Actually we also see a sign of further slowing if we look at the numbers in a more western style of analysis rather than the year on year system.

The quarter-on-quarter growth of GDP in each quarter of 2011 and in the first quarter of 2012 was 2.2 percent, 2.3 percent, 2.4 percent, 1.9 percent and 1.8 percent respectively.

So if we take the latest quarter and annualise it using the American system we would see 7.4% economic growth reported, so a further dip. Using the last half-year of 1.9% and then 1.8% gives us just more like 7.6%.

So if we take current economic growth of 7.4% (American annualised style compounded) and add the latest consumer price inflation numbers of 3.6% for March we are seeing signs of a general slow down. Indeed Consumer Price Inflation has fallen from a peak of 6.5% last July and is below the 4% target. What will it do next? Well we get something of a clue from my old friend the CRB (Commodities Research Bureau) Index.”

One Response to “Chinas Real GDP Growth”

  1. Brewskie said

    Did you hear that thud? China’s home sales drop 18% in the first quater.

    http://www.bloomberg.com/news/2012-04-13/china-property-sales-drop-shows-risk-of-hard-landing.html

    “China’s 18 percent first-quarter drop in home sales contributed to the slowest economic expansion in almost three years, highlighting the challenge for leaders who want to curb property prices without sinking growth.

    The value of homes sold declined to 709.9 billion yuan ($112.7 billion) from a year earlier, the National Bureau of Statistics said in Beijing yesterday. Gross domestic product in the world’s second-biggest economy expanded a below-forecast 8.1 percent” (Brewskie note: Fake!) “from a year earlier, decelerating for a fifth quarter.

    […]

    Societe Generale SA’s Yao Wei said growth may decelerate to 7.8 (Brewskie comment: 7.8% expected – what’s the real decline?) percent in the second quarter on tightening in the property market and a further slowdown in housing investment. Standard Chartered Plc economists gave the same forecast for GDP growth this quarter and projected four more reserve-ratio cuts of 50 basis points each this year. That would bring the ratio to 18.5 percent for the largest banks.

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