China’s reported data came in close to Beijing’s target, a figure that has been published quarterly for the past 4.5 years. But a multinational index of Chinese production indicates a much smaller growth coupled with fewer workers returning to their jobs.
“Manufacturing is being hit really hard,” said Leland Miller, CEO of China Beige Book, which measures China’s economic strength. The results are culled from mainland survey responses. “Investment is down, hiring took a serious hit, a huge hit to new orders.”
Despite showing economic stability, global economists, companies, and investors believe China’s economic picture is weaker than what is being officially reported.
Some economists say the numbers are likely 3 percentage points lower after accounting for tax revenue, property sales and other concrete measures.
Eric Pratt, head of global marketing at AVX Corp., an electronic components manufacturer, told the WSJ the data “is telling us nothing good about the China economy.” The South Carolina company has two Chinese factories. Pratt said economic indicators prompted his company to cut jobs and production.
Small changes in China have a major impact on economies in the U.S., Germany, and Japan. Access to reliable Chinese data has been a problem, and there is a growing suspicion that China has been tweaking the numbers.
To bolster the country’s economy, the central bank of China said it was reducing the amount of cash that banks need to have as reserves for the third time in 2019. It released $126 billion — or 900 billion yuan.
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