Bloomberg reports:
China's GDP Grew 6.8% Last Quarter, Slowest Pace in Seven Years ...Nouriel Roubini comments at RGE Monitor:
So the 6.8% growth was actually a 0% growth – or possibly negative growth – in Q4; and the Q1 figures look even worse. So China is in a recession regardless of what the highly massaged official numbers claim.
Yves Smith at naked capitalism writes:
If you believe the China fourth quarter GDP release, I have a bridge I'd like to sell you.
In order to keep some balance of opinions, the economists at Societe Generale wrote this morning:
Base effects and how China reports economic data largely explains what is going on with today’s figures. China reports nearly all its economic figures on a year-on-year basis so the economic data will look simply awful in the first half of 2009 given very strong base effects from the first half of 2008. Though many are likely to read this as a deteriorating trend, it will not be. We still maintain the view that the Chinese economy is in the process of “troughing out” with the nominal
monthly indicators in an inflexion point ie they are declining at a slower pace in December than they did over October-November. Q1-2009 is likely to represent the low point in growth for this cycle (we are currently forecasting growth of 4.0%YoY to Q1). As China is likely to revise Q3-2008 lower, the Statistician is setting up the numbers for a relatively firm statistical bounce in the second half of the year.
It is not all data manipulation though. Policy will clearly be gaining traction in the second half of this year. Beijing uses much more direct policy tools – such as spending diktat or lending guidance to banks – and these were already having tangible effects in December unlike the indirect interest-rate mechanism of developed economies that depends on an impaired financial system for transmission.
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