Trees may not grow to the sky, but they can tell tall tales about their height.
That at least is what we can infer from this piece in the New York Times, where reporter Keith Bradsher inspects some recent economic signals coming out of China. The closer he looks, the less reliable those statistics appear.
Many China hands follow the advice of Li Keqiang who is reported by Wikileaks to have told a US diplomat that the only statistics really worth tracking are electricity use, rail shipments and bank lending. The rest are widely understood to be make-believe, with local officials telling party authorities in Beijing what they want to hear.
But if Bradsher’s piece gets it right, even those statistics don’t tell the truth.
Record-setting mountains of excess coal have accumulated at the country’s biggest storage areas because power plants are burning less coal in the face of tumbling electricity demand. But local and provincial government officials have forced plant managers not to report to Beijing the full extent of the slowdown, power sector executives said.
If power use statistics are also inflated, Chinese growth and total GDP may both be less than many observers believe. It’s always hard to tell what is happening in China — even and perhaps especially when you are there yourself. The country is so big, the government so secretive and the economy is becoming so complex that the smartest experts tend to be those who have the least confidence in their own forecasts and projections.
If it is hard to get a handle on the present state of China’s economy, it is even harder to forecast its future economic and political development. The world has never seen an economic transformation of this scale and intensity in a country this big. The uncertainty, for business chiefs and policy makers, is uncomfortable and wearing — but that is life in the 21st century.