Unfortunately, you cannot believe everything you read, even in the South China Morning Post. Take yesterday for example. The Post - like any number of other newspapers - reported on its front page that the mainland economy grew at a 10.6 per cent rate in the first three months of the year, down a touch from the breakneck pace of 11.9 per cent recorded last year (see the first chart below). Some commentators thought the latest number a good thing: evidence that growth is slowing to a more sustainable pace in response to tighter government policies. Others thought it ominous: proof that the economy continues to expand at an overheated rate, despite the cooling effect of February's snowstorms. Few, however, thought to query that figure of 10.6 per cent, which came straight from the mouth of one Li Xiaochao, a spokesman for the National Bureau of Statistics. That is surprising, because in the same sentence Mr Li said that first-quarter gross domestic product - the total value of all goods and services produced in the economy - came to 6.15 trillion yuan (HK$6.86 trillion). Now a quick look at the CEIC database, fount of all economic information for Asia, tells us that China's GDP for the first quarter of last year was 5.03 trillion yuan, implying a growth rate of 22.3 per cent, not 10.6 per cent. This is a huge discrepancy. We would expect some difference between the two numbers, because the 22.3 per cent figure is based on raw data and does not allow for price rises, whereas Mr Li's 10.6 per cent has been adjusted for inflation and is known as a 'real' rate in economists' jargon. And as we know, the mainland is suffering from inflation, with consumer prices up 8.3 per cent over the year to March. But if we deflate the raw 22.3 per cent first quarter growth rate by the average inflation rate over the three-month period, we get inflation-adjusted growth of 13.2 per cent, considerably faster than Mr Li's rate of 10.6 per cent. In fact, if we look back over the past seven years and adjust the raw GDP numbers for consumer price inflation, we get a growth rate that has consistently been faster than the official figures would have us believe (see the second chart below). Admittedly, this is a rough calculation. The National Bureau of Statistics does not use consumer price figures to make its adjustment for inflation, but another measure encompassing all goods and services, not a fixed basket, so its 'real' growth rate is bound to be different. But as Charles Dumas of Lombard Street Research points out, consumers are bearing the brunt of inflation through food price rises, while non-food inflation remains subdued. Therefore, as consumption makes up only about half the mainland economy, the GDP deflator used by the statistics bureau should be considerably lower than the consumer inflation rate. As a result, Mr Dumas estimates the 'real' first quarter growth rate was at least 16.5 per cent, not 10.6 per cent. This compels the conclusion that officials must be playing down either the growth rate, or the inflation rate, or both. Whichever it is, the economy looks dangerously overheated, no matter what the front pages might say.