Economic data supplied by any government is always suspect, and we’ve come to accept that every bit of information should be taken with a grain of salt. But in some cases the issue goes well beyond the numbers. I was reading a communiqué from the National Bureau Statistics of China regarding residential housing, and I will share an excerpt about existing home sales:
Comparing with last month, the sales price of second-handed residential buildings in 16 cities and that of remained the same level in 10 cities. Comparing with last month, the number of cities with sales price remained the same level or decreased added 6. The growth rate of sales price in 3 cities exceeded 1.0 percent, reduced 2 cities than that in February. Comparing with the same month of last year, the sales price in 5 city declined, while that of the growth rate in 45 cities went down in 70 large and medium-sized cities, 23 cities more than in the previous month. In March, the growth rate in 41cities within 5 percent, 1 city more than in February.
My impression is that there’s a decline of sorts, and if anyone can decipher the text above, please let me know! If the U.S. Commerce Department or the Eurostat released information with the level of writing skill and clarity demonstrated by the communiqué, we would be screaming for clarification. And it’s not as if China does not have highly skilled English writers! Yet, many still accept the ongoing “economic miracle” without question!
However, the reason I was snooping around was driven by a somewhat related, yet different topic: China’s consumer confidence. I caught an article on China Daily titled “Consumer confidence rises in Q1,” and the piece was extremely upbeat.
The consumer confidence index, jointly released on Thursday by the China Economic Monitoring & Analysis Center (CEMAC) of the National Bureau of Statistics (NBS) and The Nielsen Company, showed that China has a score of 108, up from 100 in the fourth quarter of last year and representing the highest level of confidence since 2009.
Wait a second! The Nielsen Company? Don’t take me wrong. Nielsen has been conducting these types of surveys forever, is extremely capable of delivering the goods, and the report is available at the company’s website. But since when does the Chinese National Bureau of Statistics need to engage the services of an American company to survey the economic demeanor of its citizens? It’s called “Public Relations” and Nielsen adds legitimacy – at least on the surface. Then Mitch Barns, president of Nielsen Greater China added:
With government policies to stabilize inflation coming into effect, as well as a commitment to carefully monitor prices going forward, consumers have regained their confidence swiftly.
Wonderful! So what happened to the National Bureau of Statistics' own data that shows consumer confidence on February 2011 at its lowest level since 1996 -- and negative -- two years after the “big yuan”devaluation? And that is a monthly reading, not quarterly. The chart below depicts the point quite well.
David Riedel of Riedel Research appeared on CNBC with his own view on the subject, and shared with the audience that his company does “a monthly survey of Chinese consumer confidence and its (results) are pretty scary.”
It shows, Chinese consumers expect 9% inflation over the next year. Those expectations are the highest since Riedel began the survey in 2007. And even if actual inflation comes in lower, it may not matter. The perception is 9% and Riedel thinks the perception will have a wide ranging impact; "a direct impact on their sentiment, their spending and their outlook,” he says.
Now we have two sides to the story, and one can pick and choose. And as American and European consumer sentiment readings are in negative territory, the Chinese are apparently immune. Maybe the strike in Shanghai as reported by Reuters was not being acknowledged because it provides yet another window into reality.
China's tightly controlled state media has made no mention of the unrest, and the city's government, which is working hard to turn glamorous Shanghai into a global financial hub to compete with Hong Kong and London, has denied knowledge of the strike.
Or maybe it wasn’t a strike but rather a confidence celebration. Maybe it was the set for a new TV show. I wonder if Nielsen will provide the ratings!