How True Are China’s Economic Reports?

What might seem an arcane detail is actually “a real indicator” of economic trends, says Mr. Cavey, a China analyst at Macquarie Bank. Digger sales point to likely construction, which is a big driver of Chinese economic growth, he notes. “You can’t draw macro conclusions from those figures,” he acknowledges, “but they serve as a sense check of official data.”

That’s important when the official data paint a conveniently rosy picture, such as Tuesday’s announcement that GDP growth in the last quarter of 2011 was 8.9 percent, marginally more than expected, which suggests China will have a soft landing as its economy cools.

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