Mainstream Indicators Don’t Tell the Whole Story About China
China’s Purchasing Managers’ Index (PMI) – which indicates the general health of the manufacturing sector – has rebounded to a three-month high in July. While I’m sure that makes some analysts who are more bullish about China’s prospects happy, it doesn’t exactly fit with our analysis of the country’s growth.
However, it turns out the best way to track China’s performance is by not relying on mainstream indicators alone – just like Louis Basenese has been doing for months now. That’s because “growth figures could be subject to meddling from anxious regional officials,” according to Reuters’ Jon Gordon.
One lesser-known indicator that more accurately gauges China’s growth is power consumption, since it can show increases in industrial production activity. And currently, power use in China has remained stagnant since March.
That’s not the only reason you should be leery of China, though….