Can We Trust China’s Market Analysts?

Written by Christopher Nash.


img_2409-1
The growth of China to the end of 2012. Since then, growth has decreased further every year and is coming to a standstill.
 
Read on for more recent statistics.

It’s a commonly known fact that China is one of the world’s greatest superpowers; in fact, they are the largest market driver in the world which could explain the recent volatility in the market.

Misrepresentation or Lies?

China claims their growth rate is ~7%, while analysts show the figure is closer to 5%. I’m starting to think the number is closer to 3-4%. This alone is a big reason for the unstable economy.  Bad Chinese economic policy also doesn’t help along with the fact that China is dumping significant amounts of US bonds.

Ghost Cities

Just look at China’s ghost cities; if the Chinese people were prospering due to large growth rates, wouldn’t these cities and new buildings be occupied? The fact remains, Chinese citizens and workers cannot afford to occupy the real estate many were so hopeful about.

Investors of these buildings are not seeing returns and many securities that back the investments are going into default if they haven’t already; seems very reminiscent of the 2007 Subprime Mortgage Crisis, and we all know what happened as a result of that. In the near future, It seems we may have another financial crisis on our hands people.

 

 

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Relevant Articles:

http://www.economist.com/blogs/freeexchange/2015/10/chinas-data-doubts



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