Osprey Associates reported that China revealed official GDP growth for the full year at 6.9%, its lowest read in a quarter of a century.
As policymakers push on with their efforts to rebalance the world’s second largest economy to reflect greater reliance on consumer-led consumption, a protracted rout in stocks on its two indexes, growing pressures in consumer and business credit and subdued demand from its key export markets have raised concerns among investors around the world.
According to James Conroy, chief economist at Osprey Associates, there is considerable doubt over the accuracy of the official GDP figures. “China’s official statistics have always been accompanied by a standing suggestion that a pinch of salt be applied before digesting. The ruling communist party doesn’t want to be seen as missing its own targets,” he said.
Osprey Associates says it estimates that the real rate of GDP growth in China over 2015 would be closer to around 5% a number which other analysts would consider optimistic. Uber-bear, Marc Faber, publisher of the highly-respected Gloom, Boom & Doom report, estimates the Chinese economy grew by as little as 4% last year.
“Looking at physical indicators — things like exports, things like consumption of steel, cement, natural gas and electricity – none of them appear to be consistent with a 6.9% read on GDP,” said Conroy.
The firm said that, despite the overall bearish sentiment towards China, it saw greater risks elsewhere in the global economy identifying the United States as likely to fall into a recession this year.
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