David Thomas is an expert on doing business in China. With a successful history of forging global business relationships, David helps leaders, entrepreneurs and investors solve the China puzzle. As part of that, he’s launched a daily email newsletter ‘China Bites’ which you can read here on Targeting China.

There was lots of comment in the news yesterday about China’s growth rate for 2018 “to the lowest in nearly three decades” of 6.6% for the year, down a mere 0.2% compared to 2017, and ‘more evidence of China’s slowing economy’. Whilst a growth rate of above 6% would be celebrated in most parts of the world, and probably declared as too good to be sustainable in the long term, there is a certain amount of gloating in the western media each time it falls in China, even if only by 0.2% p.a.

Reuters reported: “But the problem lies in consumption. As the U.S. and China clash on many fronts, consumer sentiment appears to have been hurt. Until now, solid wage growth has been supporting consumption but now there appears to be a sense of vague anxiety about the future.” I am not familiar with the technical term “vague anxiety” but no doubt this was dreamed up by a reporter looking to find words to support his/her argument!

It seems the western media and financial markets are fixated on the single growth rate declared by China each month/quarter/year which, in my view, is reported far too early (21st January this year) to be 100% accurate and, in any case, is a very crude view of China’s large, complex and multifaceted economy. I remember hosting a group of Chinese statisticians from all the main provinces on a study tour to Sydney who were interested in how Australia reports its annual GDP numbers. As I looked around the room at the wide-eyed group of ernest public servants, all dressed neatly in their black suits and ties, I wondered if their annual GDP numbers could be relied on by stockbrokers, fund managers and business leaders around the world as an accurate barometer of the state of China’s economy. I would suggest that a stroll along the Nanjing Road in Shanghai might give you a better idea!

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