Looking for another perspective on where the mainland economy is heading? Try these five indicators
Few China-watchers think very much about fertiliser when they try to predict where the mainland economy is heading.
They may be missing out. Chemical fertiliser production - at least by some accounts - serves as a remarkably good predictor of the country's industrial production. When the Organisation for Economic Co-operation and Development created an index to forecast changes in the mainland economy, fertiliser was among the six statistics the international agency used.
Chemical fertiliser is an example of what economists call a leading indicator, a statistic that forecasts changes in an economy. To identify leading indicators, forecasters look back in a search for numbers that have a long enough 'lead' - meaning they move before the rest of the economy does.
'One of the holy grails of bank economists is to find leading indicators,' says Stephen Green, Standard Chartered's China economist.
But finding the right predictors is notoriously difficult, inspiring the adage that economists have accurately predicted nine of the past five recessions. As a result, analysts often find themselves looking for signals in bizarre places, watching everything from cardboard boxes to lipstick purchases.
