Official Chinese growth figures dismissed as ‘fantasy’

China is growing only half as fast as official data shows, according to foreign investors and analysts who challenge how the world’s second largest economy can be measured so swiftly.

Beijing reported last month that China’s economy increased a steady 7% in the first two quarters of the year, spot on its official 2015 target.

That statistical stability comes at a time when prices of commodities have cratered. However, perhaps the biggest question is how a developing country of 1.4bn people can publish its quarterly GDP statistics weeks before first drafts from developed economies.

“We think the numbers are fantasy,” said Erik Britton of Fathom Consulting, a London-based independent research firm.

The uncanny official calm in China GDP data may well be contributing to sceptics’ exit from Chinese assets just as the authorities struggle to manage a volatile stock market.

Fathom, which decided last year to stop publishing forecasts of the official GDP release and instead publish what it thinks is really happening, reckons growth will be 2.8% this year, slowing to 1% next year.

In the latest Reuters poll of economists, based inside and outside China, the range of opinion is 6.5% to 7.2%. For next year, it is 6.3% to 7.5%.

Reuters