The blog is awarding itself a pat on the back today, for its decision to focus on electricity consumption and bank lending as key indicators for China’s economy. According to the Wall Street Journal, these are 2 of the only 3 statistics used by China’s Vice Premier, Li Keqiang (the other is rail cargo).
Li’s view matters, as he is expected to take over as premier in 2012. And he apparently has the same view as the blog about the value of most Chinese statistics. He told the US ambassador that the GDP figure, for example, is “man-made and therefore unreliable“.
Thus it is no great surprise to find that Li also seems to share the blog’s concern that China’s economy is now in danger of over-heating. This has to be a growng concern, given the trends shown in the above chart:
• Bank lending (red column) is on track to be up 38% in H2, versus H2 2008
• Electricity consumption (blue line) is up 24%.
No economy in the world can grow at these rates without building up problems for the future. As China’s Academy of Social Sciences has just reported, “high inflation and soaring housing prices have contributed to a growing sense of popular disaffection“.
So far, the current leadership is still trying to avoid taking the painful measures that will be needed. But at least a debate seems to be underway, with Li reportedly arguing that “more efforts should be provided to stabilize prices next year” and to define economic growth rate targets “reasonably“.