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Bandalup2

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22/01/16

01:16

Post #: 16846279
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Originally posted by edgardig ↑

Irrespective of the daily hurly-burly that goes on in forums, there is something very, very odd happening in the reporting of financial news. Why it's happening is anyone's guess, but one cannot deny it is happening.

Today we see a prime example:

"China's economy grew 6.9 percent last year, data showed on Tuesday -- its slowest pace in a quarter of a century. There was some relief in the markets, however, that growth at least matched forecasts."

Is there any truth in this statement? Well yes, partially... And that is what makes it all so insidious.
Here is what it should have said:

"China's economy grew 6.9 percent last year, data showed on Tuesday -- a lower percentage rate than last year but given the higher GDP level that it was addressing, in actual dollar terms, last year the Chinese economy actually grew at the same rate or faster than in previous years."

In 2007, China reported its highest percentage of growth in 35 years. The percentage was 14.2%. That is, it was 14.2% on a GDP of 3,525 billion USD. Pretty impressive eh? Now let's look at last year's growth figure. 6.9% on a GDP of 11,280 billion USD.

Now you do the math. Pretty impressive growth, eh? So why don't the media think so?

Expand

Because no-one believes the Chinese data. Its PR that is all due to their obsession with maintaining growth at a certain level in order to stave off panic on the streets. If you look at other more reliable data it all points to China growing at 2% to 5% p.a. and possibly even being stagnant according to some.

http://www.economist.com/blogs/economist-explains/2016/01/economist-explains-11

BHP Price at posting: $14.20 Sentiment: Hold Disclosure: Not Held
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