11.9% Growth, 100% Rhetoric

It is understandable that China will want to put a positive spin on its potentially overheating economy, but sometimes their methodology is questionable. Two things caught my attention this morning:

First: If you check the WSJ or FT, you see that economic growth sped up from 11.1% in Q1 to 11.9% in Q2. The 11.9% figure announced yesterday is appropriately the focus of the article. On the other hand, if you check the People’s Daily, there is no mention whatsoever of the 11.9% figure. The only figure quoted is the first half figure (11.5%).

Second: When Statistics Bureau spokesperson Li Xiaochao announced the figures, one reason given for the faster than expected growth was effective pollution control policies. Could China’s pollution control policies really be the reason growth is speeding up? If this is the case, why does China always say that it can’t be obligated to implement environmental standards because they will disrupt its fragile developing economy? Generally, pollution control policies force companies to spend extra money cleaning up their act, and while they can spur innovation and fixed asset spending, I am dubious that the government’s reasoning in this case was true.

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