Replies to post #6393 on The Rising Influence of Rising Affluence

[DewDiligence]

Where are Jim Chanos and the China permabears today? When is the hard landing coming? LOL

[jbog]

China’s official 7.8 percent economic growth for 2012 may have overstated expansion by twice the real rate, and is only now headed for a “legitimate” 8 percent gain, Eaton Corp. Chief Executive Officer Sandy Cutler said.

Based on indicators such as consumer consumption and electric power usage, China’s gross domestic product probably grew 3 percent to 4 percent last year, Cutler said yesterday in a telephone interview. Growth is accelerating now that China is past the distractions from its leadership change, he said.

“That’s what we and so many multinational companies have been feeling there in China for the last year and a half, the economy really hasn’t been growing at 7 or 8 percent,” Cutler said. “If we could get back to an 8 percent growth rate in China for 2013, that would be a pretty darn good year.”

His skepticism about the data echoes complaints from economists such as Li Wei of Standard Chartered Plc in Shanghai that China had inflated third-quarter growth before the November congress where the ruling Communist Party had its decennial transfer of power. Cutler runs a manufacturer that got more than half its 2012 revenue of $16.3 billion from outside the U.S.

Mark Williams and Qinwei Wang, economists with Capital Economics Ltd. in London, wrote in October that China’s third- quarter economic growth of 7.4 percent was “implausible.” Standard Chartered said in October its analysis indicated the economy expanded 6.5 percent in the quarter.


http://www.bloomberg.com/news/2013-02-05/eaton-ceo-says-china-gdp-report-overstates-growth-rate.html

[DewDiligence]

Blurb on China’s urban migration and GDP growth that’s simple and notable:

http://online.barrons.com/article/SB50001424052748704882404578382541810970924.html

China grows by moving people from the farms to the cities, and every time someone moves off the farm into the city, they contribute six times more to GDP than they did on the farm. If you do this 10 or 20 million times per year, you get 6% to 8% GDP growth just out of the demographics.