Update to this post. Official Chinese statistics indicate 6.3% y/y growth in Q2. Maybe it’s less?
The FRBSF China Cyclical Activity Tracker (China CAT) of Fernald, Hsu and Spiegel (JIMF, 2020) indicates slower growth than reported by NBS:
Figure 1: Official Chinese GDP growth, standardized and detrended (blue), CCAT (green), and Imports (tan), in standard deviation units. ECRI defined peak-to-trough recession dates shaded gray. Source: China CAT (August 2023 version), ECRI.
Note that the Q2 observation for CCAT is different from usual because the consumption series was available only through April. Why the release of consumption data was delayed is a mystery (although periodic delays are not altogether unexpected).
The authors conclude:
Over the past four quarters ending in the second quarter of 2023, growth in cyclical Chinese economic activity was -0.51 standard deviations from trend.
In the previous version of this post, I translated the CCAT reading in standard deviation units into GDP growth using an ad hoc regression, resulting in an implied 5.3% growth rate. The authors of the SF Fed China CAT (John Fernald, Mark Spiegel and their team) were kind enough to provide me with the methodologically consistent translation of their China CAT readings to GDP. These results are reported in Figure 2.
Figure 2: Year-on-Year Chinese GDP growth (blue), and growth implied by China CAT (red), IMF WEO July forecast (sky blue square). ECRI defined peak-to-trough recession dates shaded gray. Source: NBS, personal communication, IMF WEO July update, ECRI and author’s calculations.
The GDP growth rate implied with Q2 CCAT is 3.9% instead of 6.3%. The intuition for the translation is as follows:
Our estimated GDP trend is about 5.1% (final tab in the CCAT spreadsheet), which is based on a biweight filter with a bandwidth of 24 quarters. (The estimated trend was about 6 percent back in 2019). The standard deviation of detrended GDP is about 2.4 percent for the full sample. So if growth is 0.51 standard deviations below trend, then it would correspond to growth of around 3.9%.
This low numbers merely add to concerns heightened by the release of July trade figures, as well as deflation in the CPI y/y.
https://www.nytimes.com/2023/08/11/us/politics/biden-china-criticism-economy.html
August 11, 2023
Biden Describes China as a Time Bomb Over Economic Problems
The sharply worded comments are the latest example of the president’s willingness to criticize China even as he tries to ease tensions.
By Michael D. Shear
President Biden warned on Thursday that China’s struggles with high unemployment and an aging work force make the country a “ticking time bomb” at the heart of the world economy and a potential threat to other nations.
“When bad folks have problems, they do bad things,” the president told a group of donors at a fund-raiser in Park City, Utah.
Mr. Biden’s comments are the latest example of the president’s willingness to criticize China — often during fund-raising events with contributors to his presidential campaign — even as his administration seeks to ease tensions between the world’s two largest economies.
Earlier this summer, at a fund-raiser in California, Mr. Biden called President Xi Jinping of China a “dictator” who had been kept in the dark by his own officials about the spy balloon that flew over much of the United States from late January to early February before being shot down by the U.S. military.
On Thursday night, Mr. Biden said he was trying to make sure the United States has a “rational relationship with China,” but he signaled that he continues to view Beijing as America’s biggest economic competitor.
“I don’t want to hurt China, but I’m watching,” Mr. Biden said in Utah….
https://www.nytimes.com/2023/08/11/us/politics/biden-china-criticism-economy.html
August 11, 2023
Biden Describes China as a Time Bomb Over Economic Problems
By Michael D. Shear
President Biden warned on Thursday that China’s struggles with high unemployment and an aging work force make the country a “ticking time bomb” at the heart of the world economy and a potential threat to other nations.
“When bad folks have problems, they do bad things,” the president told a group of donors at a fund-raiser in Park City, Utah….
[ “When bad folks have problems, they do bad things,” the president told a group of donors at a fund-raiser in Park City, Utah….
“When bad folks have problems, they do bad things,” the president told a group of donors at a fund-raiser in Park City, Utah…. ]
https://fred.stlouisfed.org/graph/?g=16TkI
August 4, 2014
Real per capita Gross Domestic Product for China, United States, India, Japan and Germany, 1977-2022
(Percent change)
https://fred.stlouisfed.org/graph/?g=17ici
August 4, 2014
Real per capita Gross Domestic Product for China, United States, India, Japan and European Union, 1977-2022
(Indexed to 1977)
ltr is reverting to her worst tactics here, apparently desperate to say anything to distract from the subject of this post. Here, she has “lied with statistics”, manipulating real GDP per capita data to give the impression that China is the wonder of the world. In fact, China provides far less economic welfare for it’s residence than do the U.S., EU, Germany or Japan, contrary to the impression ltr has tried to convey. Here are the actual data, without tricky manipulation:
https://fred.stlouisfed.org/graph/?g=17Ms4
To be clear, all I did was use ltr’s own chart, removing the manipulation.
https://fred.stlouisfed.org/graph/?g=17icc
August 4, 2014
Real per capita Gross Domestic Product for China, United States, India, Japan and European Union, 1977-2022
(Percent change)
https://fred.stlouisfed.org/graph/?g=17ici
August 4, 2014
Real per capita Gross Domestic Product for China, United States, India, Japan and European Union, 1977-2022
(Indexed to 1977)
https://www.nature.com/nature-index/institution-outputs/generate/all/global/all
The Nature Index
1 May 2022 – 30 April 2023 *
Rank Institution ( Count) ( Share)
1 Chinese Academy of Sciences ( 7115) ( 2149)
2 Harvard University ( 3485) ( 1114)
3 Max Planck Society ( 2406) ( 642)
4 University of Science and Technology of China ( 1722) ( 637)
5 French National Centre for Scientific Research ( 4313) ( 621)
6 University of Chinese Academy of Sciences ( 2970) ( 608)
7 Nanjing University ( 1366) ( 591)
8 Tsinghua University ( 1668) ( 580)
9 Peking University ( 2111) ( 571)
10 Stanford University ( 1758) ( 524)
11 Zhejiang University ( 1309) ( 514)
12 Helmholtz Association of German Research Centres ( 2467) ( 506)
13 Massachusetts Institute of Technology ( 1844) ( 483)
14 Sun Yat-sen University ( 1152) ( 468)
15 Fudan University ( 1217) ( 439)
16 Shanghai Jiao Tong University ( 1266) ( 434)
17 National Institutes of Health ( 1155) ( 396)
18 University of Cambridge ( 1334) ( 395)
19 University of Oxford ( 1494) ( 386)
20 The University of Tokyo ( 1135) ( 367)
* Annual Tables highlight the most prolific institutions and countries in high-quality research publishing for the year
https://english.news.cn/20230811/5afd626bd33542989f5504f6dc81ffce/c.html
August 11, 2023
Community volunteer helps tackle rural elderly-care challenge
WUHAN — As in many parts of rural China, the young people of Maoqi, a village along the Yangtze River in Hubei Province, left long ago. As they headed off to cities to look for work, they left their elderly parents behind in the countryside.
Located in the city of Ezhou, Maoqi has a population of just over 2,000 but less than 500 are permanent residents, 203 of whom are above 60 years old. In the absence of nearby family, however, this elderly population do have someone to turn to.
Since 2016, a dedicated community volunteer, 33-year-old Yu Qiao, has been a guiding light for the elderly population of Maoqi. Yu extends her helping hand to those who are confined by illness, unfamiliar with digital devices, or require assistance in accessing crucial health care.
In 2021, an unconscious 82-year-old woman was found in the woods. After receiving the call for help, Yu immediately informed a village doctor and rushed to the scene. With their swift intervention, the woman regained consciousness. Yu and her fellow volunteers also reached out to the family, working in tandem to arrange her transportation to the hospital for a thorough examination. Fortunately, it turned out that the elderly woman’s dizziness was merely the result of a cold.
The incident deeply affected Yu, as it mirrored a similar event involving her grandmother. In 2018, her grandmother fainted at home, alone. Unfortunately, her neighbors noticed too late, and her grandmother had passed away before help could be called.
“I could not sleep for a long time,” she recalls.
A few months later, she returned to work and gave her cell phone number to all left-behind seniors.
“I didn’t want the same tragedy to happen to them,” she said.
Like most of her peers, Yu did not see a future in the countryside. Following her high school graduation in 2007, she left for Guangdong Province in search of employment. However, in 2010, familial responsibilities brought her back home, as her father had become wheelchair-bound due to a factory accident. By 2016, she had found employment as a community patroller in Maoqi, and soon after she got married and became a mother of two.
Yu exudes remarkable patience and innate helpfulness. She diligently visits each household, meticulously noting down each individual’s challenges and actively looks for solutions.
In her pursuit of enhancing village life, Yu is dedicated to personal growth. Her endeavors have seen her acquire driving skills, delve into legal studies, and undergo emergency medical training-all aimed at better serving her community.
Supported by the local government, Yu set up a volunteer team in 2019, which soon attracted more young people. Ever since, they have worked together to help those in need of assistance.
After her story was reported in the media, Yu won wide acclaim and a host of accolades, including the “Hubei May Fourth Medal,” the highest honor for young people in the province.
Since then, numerous villages across the province have also set up similar teams to offer support for the elders.
Cooperating with local tech companies, all of the village’s seniors now have emergency alert bracelets; a simple button press sends an alert to her office.
“Yu is the ‘little cotton-padded jacket’ of the whole Maoqi Village,” said Ke Huanzhi, a local elderly woman, citing a Chinese proverb that likens a daughter to the garment as it brings warmth to her parents….
ltr: What exactly does this have to do with measured GDP growth in China?
She is not going to respond. She has high jacked this blog alas.
Awww–is pgl jealous that he can’t hijack this thread as he does most others?
Pot calling the porcelain black?
Little baby Jonny boy and his emotional issues!
China is a 5,000 year-old civilization of 1.4 billion, with ever so many wonderfully educated people who know just how to build the Chinese economy, with ever so many good people, dedicated people, who are indeed building the Chinese economy. Be completely sure, China will flourish.
China is a 5,000 old culture which went from being among the centers of advancement to a land of poverty and hunger. Goodness is not the issue. China managed to fall behind the developed world for centuries, and remains behind now, no matter how much you manipulate the data. There is no particular reason to think China will ever catch up.
Don’t believe me. Believe history.
Nope, there isn’t much reason, especially given how all those wonderfully educated people are severely limited in what they can do or say by the government.
https://www.salon.com/2023/07/30/chinas-great-leap-backward-so-much-for-the-next-dominant-superpower/
Although it must be said the end-state, or even the middle state, might work out very well for China – with 60% of the population it has today, much cheaper housing, and, one presumes, significantly higher wages (due to the population decrease), the people may well have a much higher standard of living.