China’s electricity consumption growth just 2% in March

Economic growth


China elec Apr13.pngAs new premier Li Keqiang noted some years ago, China’s GDP statistics are “man-made and therefore unreliable”. But as leadership targets, they are very important in signalling the direction to be taken. Thus the blog is quite amazed that the financial sector has only now begun to wake up to the implications of the new policies announced in recent months.

Analysts had clearly maintained a short-term focus on day-to-day developments, and ignored the bigger picture. Yet Li and President Xi have made it quite clear they intend to rebalance the economy away from exports and towards encouraging domestic consumption. And as the blog noted in the Financial Times a year ago, average incomes in China are a tenth of those in the West, so growth in this New Normal will be much slower than before.

Just how slow is, of course, still not clear. But data for China’s electricity consumption – a much more reliable indicator than GDP according to premier Li – may provide some important clues. As the chart shows:

• It grew at just 4% in Q1 (red square) versus 9% in 2012 (green)
• Equally, March was only up 2%, confirming the message of February’s slowdown
• Even more significantly, the leadership showed no sign of panic over the numbers
• There was no suggestion of new stimulus; instead, as China Daily reports, Li noted:

“Overall, the Chinese economy had a smooth start in 2013. But many uncertainties, both at home and abroad, still persist and make the overall situation quite complicated. The producer price index fell 1.9% versus 2012, reflecting operational difficulties and pressure on profit growth in the industrial sector amid weak market demand.

“To better grasp the curve of the economy, it is imperative to strengthen foresight,” Li added, “as this will be crucial for the sustained development of the economy”.

Taken together with the increasing number of curbs on property prices, it seems clear that the new leadership has decided to act quickly on the major problem areas. The housing bubble, and debt build-up in local government (now 20%-40% of GDP), have to be addressed whilst they are in their honeymoon period. They cannot be left till next year.

Action today will be good news for long-term growth. But in the short-term it will likely provide a very bumpy ride. The parallels with 1993 are therefore looking more and more relevant.


India's auto sales enter the New Normal


India is the 3rd largest Asian auto market after China and Japan, and a year ago...

Learn more

Affordability now the key to future success


The ‘middle ground’ was the place to be to capture maximum profits d...

Learn more
More posts
Merkel warns of need to prepare for No Deal Brexit

Most people missed the fact that last Tuesday was the last possible date to delay the UK’s exi...

World moves from Denial to Anger, as the Paradigm of Loss moves forward

I have been warning about the Covid-19 risk since early February, and in April suggested here that: ...

The New Normal for global industry

The global chemical industry is the third largest sector in the world behind agriculture and energy,...

Debt, deflation, demographics and Brexit set to challenge London house prices

London property websites haven’t used the word “reduced” for many years. But it...

The bill for two decades of doomed stimulus measures is due

The Financial Times kindly made my letter on the risks now associated with central bank stimulus the...

Local supply chains replace global trade as world starts to “do more with less”

Something quite dramatic is happening in the global economy.  Of course, Wall Street analysts still...

Financial markets enter their Convulsion phase

Many companies and investors are still comparing today’s downturn to the 9-month hiccups seen afte...

World risks moving from Denial into Anger as the Paradigm of Loss moves forward

The head of the IMF has warned again on the likely scale of the economic depression ahead: “Gl...


Market Intelligence

ICIS provides market intelligence that help businesses in the energy, petrochemical and fertilizer industries.

Learn more


Across the globe, ICIS consultants provide detailed analysis and forecasting for the petrochemical, energy and fertilizer markets.

Learn more

Specialist Services

Find out more about how our specialist consulting services, events, conferences and training courses can help your teams.

Learn more

ICIS Insight

From our news service to our thought-leadership content, ICIS experts bring you the latest news and insight, when you need it.

Learn more

Uncover exclusive industry upates from ICIS

Interested to uncover more articles related to this topic? Explore additional news, insights and intelligence, tailored to the markets you are interested in by accessing exclusive content from