appConfigEntityId

bodyType

customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

hooksAmpRedirectArticle

articleSchemaContent

hooksArticlePageAdvertisementConfigArticle

liveArticle

appConfig

advertZone

sentiment

contentLock

topics

types

sections

paywallTypes

createdDate

publishedDate

sponsorType

urlAlias

moreOnThisArticles

sectionsV2

commentCount

authorLocations

authors

corrections

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

articleSpeeches

socialHeadline

headline

images

flag

firstTopic

glossary

flattenTypeIds

image

relatedLinks

relatedNewsletters

__typename

sponsor

pdfFiles

seriesReverseOrder

series

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

readingTime

customTimezone

liveContents

json

Jake Van Der Kamp

"We must keep a sober mind and realise that the downward pressure is increasing ..."
Premier Li Keqiang,
SCMP, April 15
Some years ago, when he was not yet Premier, Mr Li offered a sober assessment of mainland economic statistics. He said he trusted only the figures on electricity consumption, railway freight loadings and foreign trade in goods.
He was speaking somewhat in jest, but not entirely, and I shall take him at his word. How do his three benchmarks look now?
The blue line in the first chart shows you the year-on-year growth rate of electricity consumption in the mainland, smoothed out here with a six-month moving average because it would otherwise look like a seismograph record in an earthquake. I quite agree with the emphasis Mr Li gives this statistic.
Everywhere in the world it is a good proxy for economic growth. It is up to date and it can be precisely measured so that government cannot easily fudge it.
And yes, Mr Li has some reason to invoke sobriety. The growth rate stands at only 2.8 per cent. Note in particular the dip into negative territory in early 2009 when the official figures said the economy was still growing at 6.6 per cent. It was minus 5, said the electricity numbers. I refer you to my thoughts on fudge.
I am not so sure, however, about railway freight loadings. Most land transportation of freight in the mainland is now on highways. The red line in the chart representing the railway figures may thus overstate the sobriety case. Nonetheless, notice how closely it approximates the ups and downs of electricity consumption.
I am sure it still speaks an element of truth.
And now we go to foreign trade in goods where one statistic rings the alarm bells for me more loudly than the electricity and freight figures do. Over the last year there has been an enormous surge in the goods trade balance. It now runs at a jaw-dropping surplus of US$500 billion a year.
Forget the concerns about mainland export growth. It is actually rising while still declining for the rest of Asia. The problem is a big drop in imports, which implies massive destocking across the economy. The implication here is also that a countervailing increase in capital outflows last year has become much greater.
You have to read the signs of it from these trade figures because capital flow figures are only published long after the event and even then are hidden in service imports and supposed errors in calculating the balance of payments.
But the evidence of capital flight is certainly growing stronger at the moment and matters are not helped when the latest monetary figures show an ever more severe pinch on liquidity with M2 growth at only 9.8 per cent, the lowest I can see on record.
Meanwhile, a young yahoo punter on the Shanghai market buys an 8 million yuan (HK$10 million) Lamborghini with his recent speculative winnings and quickly wrecks it in late-night road racing.
And Nero fiddles while Rome burns.
jake.vanderkamp@scmp.com


The tale of murkiness that is the Lok Ma Chau Loop

China refusal to apologise for CCTV blackface skit all wrong

Plug Hong Kong Disney’s bottomless cash sinkhole forever and ever, and use its magic land for homes

China’s got a trade problem that can’t be solved by Belt and Road

Jake's View

Surge in goods trade balance rings alarm bells for mainland economy

China's Premier Li Keqiang once said he trusted only the mainland figures on electricity consumption, railway freight loadings and foreign trade in goods. Photo: AFP

Downward pressure on China's economy 'increasing', admits Premier Li Keqiang

Chinese Premier Li Keqiang presides over a symposium on current economic situation in Beijing. Photo: Xinhua

Business

Opinion

Reading the signs in the mainland economy, evidence of capital flight is growing stronger as the big drop in imports implies massive destocking


Expresses the views, ideas and conclusions of the author. (Eg. Enough of Crazy Rich Asians, think of crazy poor Hongkongers.)


Column

Surge in goods trade balance rings alarm bells for mainland economy

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Reading the signs in the mainland economy, evidence of capital flight is growing stronger as the big drop in imports implies massive destocking

Reading the signs in the mainland economy, evidence of capital flight is growing stronger as the big drop in imports implies massive destocking