John Cassidy
THE NEW YORKER - August 13, 2015
In the wake of Beijing’s decision to
devalue its currency this week, the scuttlebutt that has been
circulating in western financial circles for months has made the front
of the Times: an article by
Neil Gough, datelined Hong Kong, relayed concerns that the Chinese
economy probably isn’t growing at the official annual rate of seven per
cent, and that, in fact, the official figures are so unreliable that
it’s impossible for outsiders to figure out what’s really happening.
That’s what Bill Miller, the renowned investor, and other Wall Street skeptics have been saying for months,
and I suspect they are right. Is it really plausible that in the first
and second quarters of this year the Chinese economy expanded at an
annualized rate of precisely seven per cent, which just happens to be the official target for growth in what President Xi Jinping has called the “new normal” era?
Back
in 2007, according to cables released by WikiLeaks, a senior figure in
the Chinese Communist Party, Li Keqiang, told the U.S. ambassador that
China’s G.D.P. figures were “man-made and therefore unreliable.”
Other Chinese officials insist that things have changed since then, but
it’s hard to know how seriously to take this claim. Even if you accept
the official G.D.P. figures at face value, some of the recent growth
appears to have emerged from the rapid expansion of the financial-services sector, which, as my colleague James Surowiecki wrote in June, has been caught up in a raging stock-market bubble.
According to private-sector readings, which aren’t filtered through
China’s state apparatus, manufacturing and real estate, the two primary
engines of the Chinese miracle, are both slumping. The debate among China-watchers is about whether these declines are intensifying or coming to an end.
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