Monday, July 18, 2005

Beware

ContraHour: Confucius Say: Beware Investment Advice From The Chinese
But it is the performance of the economy that has most foreign investors puzzled. Hong Kong bankers joke that China is the only country in the world where annual gross domestic product growth is announced before December 31, and every province declares a growth rate above the national average.

In fact, many economists are convinced that the growth numbers are deliberately designed to smooth the peaks and troughs in growth.

Last year economic growth was officially 9.5%, against 9.3% in 2003. In the first quarter it allegedly grew by 9.4%; officials expect it to have expanded by between 9.1% and 9.3% in the first half.

Many analysts believe that Chinese growth in the mid-1990s was probably only half the official figures; last year it was almost certainly greater.
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