China's economy entered into recession in December 2011.
That's very old news to readers of Political Calculations, a little-read blog that somehow managed to scoop a number of financial institutions and even the New York Times in reporting on the poor health of China's economy back in February 2012.
At least now we know why so many of these organizations were so far behind the curve in understanding that a large-scale slowdown in China's economy has been underway for nearly seven months now - they appear to actually rely upon the Chinese government for their economic data. The New York Times might perhaps be finally recognizing that error in judgment:
HONG KONG — As the Chinese economy continues to sputter, prominent corporate executives in China and Western economists say there is evidence that local and provincial officials are falsifying economic statistics to disguise the true depth of the troubles.
The article goes on to detail evidence of the slowdown that has shown up in recent months, mostly from an accumulation of stocks of coal, copper and other commodities, including the nation's rates of electricity production and consumption, which had previously been taken as a good measure of China's overall economic health.
But the thing that stands out to us is that they've known for decades that China's economic statistics were less than trustworthy, although for completely predictable reasons, they have become more unreliable during the past year:
Questions about the quality and accuracy of Chinese economic data are longstanding, but the concerns now being raised are unusual. This year is the first time since 1989 that a sharp economic slowdown has coincided with the once-a-decade changeover in the country’s top leadership.
Political Calculations is a site that develops, applies and presents both established and cutting edge theory to the topics of investing, business and economics.
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