China pronouncement of the day

by on April 15, 2010 at 10:10 am in Current Affairs, Data Source, Economics | Permalink

And on Wednesday, the government said housing prices had risen 11.7 percent in March alone, the fastest rise ever recorded.

The overall report suggests robust growth for China (contra my view), but do note this sentence:

First-quarter growth figures were largely driven by economic stimulus spending, the statistics bureau said.

E. Barandiaran April 15, 2010 at 10:41 am

Tyler, albeit a state newspaper, the China Daily is much more reliable than the NYT. You can read about the official announcement of GDP growth in the first quarter here
http://www.chinadaily.com.cn/china/2010-04/15/content_9734449.htm

Please note this:
“In response to questions about the continuation of the stimulus package, Li said the government would keep the economic policy stable and consistent as problems and difficulties remain.”

The China Daily has improved greatly in the past 15 years and its econ journalists now know what they are talking about (likely this is also the result of improvements in official announcements from government agencies like the Statistics Bureau).

Michal April 15, 2010 at 11:16 am

For the interpretation without the typo see

http://www.chinadaily.com.cn/bizchina/2010-04/15/content_9732715.htm

meter April 15, 2010 at 11:48 am

Not sure why – given recent history here on domestic soil – anyone thinks that a 11.7% rise in housing prices in a single month is a good thing.

dth April 15, 2010 at 12:14 pm

Somehow China grew 11 percent in the quarter and overall inflation was only 2.4%. Either something miraculous or something fishy is going on over there.

E. Barandiaran April 15, 2010 at 1:50 pm

BKarn, you’re missing my point. Let me give you an example. The NYT report on China says
“And on Wednesday, the government said housing prices rose 11.7 percent in March alone, the fastest increase ever recorded.”
This is why reader Meter understood that between February and March 2010 the increase was 11.7%. However, if you read the China Daily you can see a graph on the increases of home prices and it makes very clear that the 11.7% increase was between March 2009 and March 2010; see http://www.chinadaily.com.cn/business/infographic.html

There are many reasons not to trust Chinese statistics and state newspapers. My point is that the NYT is worse than a state newspaper and I don’t trust it at all. It’s not a question that they are biased and partisans, and indeed they are, it’s also a question that they are inept. Read carefully the NYT report on China to which Tyler provided a link: it combines several official reports and the opinions of economists working in private banks in Beijing. It’s a terrible combination of partial information and a lot of opinions. And btw the problem with the NYT goes well beyond the business section –even their science section is not reliable because most of the reporters like to combine news about scientific discoveries with their own opinions on the policy and political implications of the discoveries.

Barkley Rosser April 15, 2010 at 5:49 pm

I’m willing to. It is a bubble. Definitely.

C. Roberson April 16, 2010 at 12:02 am

I agree 11% is a large increase in pricing over one year. I don’t believe this to a bubble. The increase could be from growing population in certain cities in China, increasing demand and driving the price up. Also, the recent economic increase do to the stimulus in China could be a contributor to rise in prices.

Barkley Rosser April 16, 2010 at 1:08 am

I just read the article rather beyond Tyler’s characterization of it. It says the 11.7% in March was “year
over year,” which seems to indicate that this was from last March to this. If so, then we are not talking
about a bubble. From what Tyler wrote, it seemed to be a one month surge of 11.7% in March alone, which would
be a bubble.

Actually, it is unclear what the situation is. After all, 11.7% is not that much more than what we have seen
in many years for GDP growth, and I know there have been bubbles in the past in China. So, I am a bit surprised
if it really is true that a one year increase in housing prices of 11.7% is the highest such increase ever seen.
Is that really true?

Barkley Rosser April 16, 2010 at 2:57 pm

Gracias, E.B..

I am aware that the reportorial quality of the one great “newspaper of record” has significantly declined in recent years, unfortunately. This is a phenomenon extending well beyond that paper, with about the only one I fully trust anymore being the Fin Times.

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