This is from Belmont Club ( http://pjmedia.com/richardfernandez/) in a longer story about massive Chinese investigations of official corruption:
Jonathan Laing of Barron’s Asis argues that where all the money is — or if it exists at all — is China’s deepest state secret. He interviewed Anne Stevenson-Yang, research director for J Capital, “an outfit that works for foreign investors in China doing fundamental research on local companies and tracking macroeconomic developments.” She says that the whereabouts of the lucre is anybody’s guess:
People are crazy if they believe any government statistics, which, of course, are largely fabricated. In China, the Heisenberg uncertainty principle of physics holds sway, whereby the mere observation of economic numbers changes their behavior. For a time we started to look at numbers like electric-power production and freight traffic to get a line on actual economic growth because no one believed the gross- domestic-product figures. It didn’t take long for Beijing to figure this out and start doctoring those numbers, too.
I put much stock in estimates by various economists, including some at the Conference Board, that actual Chinese GDP is probably a third lower than is officially reported. And as for the recent International Monetary Fund report calling China the world’s biggest economy on a purchasing-power-parity basis, how silly was that? China is a cheap place to live if one is willing to eat rice, cabbage, and pork, but it’s expensive as all get out once you factor in the cost of decent housing, a car, and health care.
I’d be shocked if China is currently growing at a rate above, say, 4%, and any growth at all is coming from financial services, which ultimately depend on sustained growth in the rest of the economy.