The View | How badly is China’s economy doing? Look behind the official GDP figures

In September, I talked about China’s Lost Decade: the golden age of Chinese economic growth was in the noughties, which has been followed by a slowdown. By 2010, the low hanging fruit had been picked. More recent successes have been harder won, such as modernising China and largely eliminating poverty. These are no less proud achievements, though less boast-worthy.

There is an immutable rule in nature and economics. The bigger you are, the harder it is to grow. The dinosaurs tried and failed. There are verbal reports of Chinese academics calculating China’s 2018 economic growth at as low as 1.5 per cent, rather than the official 6.5 per cent. That seems too low to me but when I tested it among my China-based investment management buddies, it caused little surprise. After all, we have seen substantial declines in many of China’s economic indicators in the past year. That slow pace would put China behind the US, which overstimulated its own economy through big tax breaks.

The wisdom of crowds is more reliable in China when it comes to slow growth. The Shanghai Stock Exchange Composite Index was the world’s biggest loser in 2018, posting a fall of 24.6 per cent. Indeed, any analyst anywhere who still believes that China has a 6 per cent growth rate should be thoroughly ashamed of themselves.

The perfect storm of 2018 is not the authorities’ fault, it merely reflects the ebb and flow of economics. The Chinese authorities sought rationally to reduce overheating and chip away at one of the highest debt mountains in the world: 253 per cent of GDP. But who would have known this would coincide with the slowing of the big European export market and US President Donald Trump’s tariff tantrum?