Gomer Pyle, one of television's most idiotic characters, used his trademark expression "Surprise, surprise!" whenever something obvious happened. Well, I might as well say the same about the news that China's manufacturing growth is beating analyst estimates. China's previous national leadership had once leaked that its economic numbers were mostly fictional. I'm pretty sure that anything the National Bureau of Statistics publishes starts with the market's consensus and then reverse engineers whatever their internal research shows by adding a few points here and there to make the index move.
Faking statistics from private sector participants is more difficult but not impossible, as the Libor scandal revealed. Such a caper is possible if only a handful of people are involved. For the record, HSBC is still a note-issuing bank in Hong Kong. I trust them about as much as trust the Libor banks . . . oh, wait, HSBC was under scrutiny for the Libor mess too.
China experts are still trying to fool the west. I was listening to the KQED broadcast of the Cambridge Forum today where a Harvard scholar retold a past conversation with Lee Kuan Yew, Singapore's longtime grand poobah. According to the retelling, Lee was still a believer in the China growth story. He's ethnic Han Chinese, of course. Asian business and political leaders always present a second set of books to Western eyes. China's political and business elites are busily buying second homes in Palo Alto, California, showing us all what they really think of their country's prospects for continued miracle growth.
The Shanghai Composite Index's reaction to the news was about as honest as one could expect. It dropped slightly on the release of the manufacturing data. Markets aren't fooled forever. I was once fooled by China's numbers.
Faking statistics from private sector participants is more difficult but not impossible, as the Libor scandal revealed. Such a caper is possible if only a handful of people are involved. For the record, HSBC is still a note-issuing bank in Hong Kong. I trust them about as much as trust the Libor banks . . . oh, wait, HSBC was under scrutiny for the Libor mess too.
China experts are still trying to fool the west. I was listening to the KQED broadcast of the Cambridge Forum today where a Harvard scholar retold a past conversation with Lee Kuan Yew, Singapore's longtime grand poobah. According to the retelling, Lee was still a believer in the China growth story. He's ethnic Han Chinese, of course. Asian business and political leaders always present a second set of books to Western eyes. China's political and business elites are busily buying second homes in Palo Alto, California, showing us all what they really think of their country's prospects for continued miracle growth.
The Shanghai Composite Index's reaction to the news was about as honest as one could expect. It dropped slightly on the release of the manufacturing data. Markets aren't fooled forever. I was once fooled by China's numbers.
