So as predicted a few weeks ago by China Economic Review using complex data matrices re-weighted with a strong sense of the bleeding obvious, China today announced that the GDP growth rate for 2016 was 6.7%. And in response, the Shanghai stock index jumped 0.7%!
But the cost to Those In Command of keeping this number up in politically acceptable territory is growing all the time. We saw a quote this week in the excellent FT from the inestimable Jonathan Anderson which nails it: “The basic problem is that the growth target they have is unrealistic. They [the leadership] are talking about, ‘Instead of 6.5 per cent, let’s go for maybe 6.2 or 6.1 per cent’. Well, that’s nice, but you have to go from 6.5 to 3 per cent to knock this back.”
And further, to quote the wise Fraser Howie, also this week: “I have been impressed over and over again by the Chinese innovation not to solve problems but to avoid the consequences of them (but at ever greater indirect cost, although appearing to minimise direct cost).”
Given the 19th Party Congress bearing down on us, Those In Command will need to keep the number up in the quarters ahead regardless. What odds 6.5% for Q1?
And in other news, by the way, later today Donald Trump takes over control of the nuclear codes. The atmospherics on China suggest difficult times ahead, but on the list of disturbingly destabilizing things he could do, the implications of the Russia/NATO/Europe situation far outweighs anything in our part of the world. Alec Baldwin, reading from a TelePrompter, suggested last weekend that Trump will hand over the reins to Pence in two months. Those in Command in Beijing would surely be happy with that. Interesting times, boys and girls!