My Take | The propaganda war is set to intensify over China’s real GDP
- Both Beijing and the West will cherry-pick and distort the numbers as their rivalry escalates, so we all need to remain mindful and alert
China’s economy is going down the drain, but that of the United States is doing fine. That seems to be the dominant Western narrative at the moment. The results of the two countries’ stock markets would seem to lend credibility to the story.
Chinese shares have reportedly evaporated US$6 trillion in the past three years, while the S&P 500 has been hitting record after record.
Of course, the connection between the stock market and the “real” economy is often debatable. That has long been so in China, and is increasingly the case in the US.
The so-called Magnificent 7 of Apple, Amazon, Alphabet, Meta, Microsoft, Nvidia and Tesla have been driving the overall market rise. They can do that because, according to a new Deutsche Bank analysis, their combined market cap would make it the second-largest country stock exchange in the entire world! Many other constituent stocks in the S&P have barely moved.
His point is that the US’ GDP rose by 2.5 per cent annually last year, or 3.1 per cent from the last quarter of 2022 to that in 2023, while China’s GDP increased by 5.2 per cent annually. Ross has called the Western narrative “fake news”. I won’t go so far.
Now, I am no economist so I don’t dare argue about the ins and outs of GDP calculations with Ross. I do think his claim about the connection between political propaganda and the mainstream Western media is worthy of serious thought.