The interesting thing about the data released yesterday was that it showed not how weak China's economy is, but how strong.
Interesting, but not surprising; you can see the evidence right outside your window.
Sure, media attention has focused on the apparent slowdown in the mainland's economic growth rate. According to the data released yesterday, China's third-quarter growth rate was just 7.4 per cent.
That's the seventh quarter in a row China's economic growth rate has fallen, and the slowest rate of expansion since early 2009, when the world was in the depths of the financial crisis.
Put like that, yesterday's figures might sound alarming.
Happily, there is no need to panic. The picture is not as gloomy as the figure suggests.
For one thing, the 7.4 per cent number announced yesterday was a year-on-year number. In other words, China's gross domestic product in the third quarter was 7.4 per cent greater than in the same period last year. But when conditions are changing, it can make more sense to look not at year-on-year data but at quarter-on-quarter figures.
These show that China's GDP grew by 2.2 per cent in the third quarter compared with the previous three-month period.
That equates to an annual growth rate of 9.1 per cent - a significant acceleration from the July-September quarter.
In fact, as the first chart below shows, while China's year-on-year growth rates appear to be slumping, the finer-grained depiction given by quarter-on-quarter data shows that its economic growth bottomed in the first quarter of the year. Since then activity has rebounded, boosted by easier monetary conditions and a pick-up in local government-backed investment projects.
Other figures support this view. For example, industrial production was up a robust 9.2 per cent in September compared with the same month in 2011, an acceleration from August's figure. Exports were up 9.9 per cent. And retail sales shot up by 14.2 per cent.
None of this should be a surprise to observers in Hong Kong. If they want to see evidence of strong economic activity on the mainland, all they have to do is look out their windows. They won't see much, but that's the point. For the last three weeks the city has been blanketed in a soupy miasma of acrid, brown pollution.
I'm not talking here about the stuff that gets belched out at street level by the city's dirty diesel engines, but the smog that rolls down from north of the border from the great industrial concentration in Guangdong.
The stronger economic activity in Guangdong is, the more pollution rolls down. The marginal sources of power that get switched on to meet extra demand are less efficient and more polluting than regular generators. The more goods factories produce, the more pollutants spew from their smokestacks. And the more Guangdong exports, the more diesel trucks and bunker fuel-burning ships ply the Pearl River Delta's roads and waterways.
Of course, there is a strong seasonal element to how much of this muck drifts down over Hong Kong. But we can eliminate that by averaging the hourly air pollution index data from the government's atmospheric stations over each quarter and seeing how the numbers compare with the previous year. The second chart shows the result. As you can see, over the last five years there have been just two periods when pollution levels fell for any protracted length of time.
The first, between October 2008 and September 2009, matched the economic slump that followed the financial crisis. The second, between the end of 2011 and the middle of this year, coincided with the slowdown in China that yesterday's data indicates is now ending.
But as we've seen, observant analysts needn't have waited for yesterday's data to know the slump was over. All they had to do was look out the window.Topics: Chinese Economy Gross Domestic Product Industrial production