China's Inflation Fight Threatens Economy
On December 6, 2010, News-to-Use.com posted about a diplomatic cable, leaked by Wikileaks, that revealed Li Keqiang, potentially the next premier in China, described Chinas gross domestic product figure as man-made and therefore unreliable."
Mr. Li went on to say that China GDP numbers were for reference only," revealing that for more accuracy on the economy he used three ways of evaluating Chinas economic activity, focusing on electricity consumption, the volume of rail cargo and the amount of bank loans disbursed.
Absolute Return Partners Neils Jensen went to work and, comparing Chinese GDP growth with electricity output over the past 15 years, found an interesting pattern:
During periods of low economic growth (the Asian crisis in the late 1990s, the U.S. recession in 2001 and the global credit crisis in 2008-09), GDP grows much faster than the electricity output. Conversely, during periods of strong economic growth (2002-07 and 2010), GDP
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