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Economists debate China' s GDP growth figures

07-25-2012 14:30 BJT

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How much is the rate of growth slowing down for the world’s second largest economy. That’s the question driving the debate over the accuracy of China’s GDP growth figures. Bank of America is the latest to weigh in, defending the official figure of 7.6 percent. But economists at several other banks remain skeptical.

China, the world’s second-largest economy, reported a 7.6 percent GDP growth for the second quarter, but that number might actually be a few percentage points lower, say some economists.

Like as much as a half-percent lower, according to Barclays economists in Hong Kong, who are going by industrial production growth.

And Mizuho’s chief Asia economist Shen Jianguang said slowdowns in industrial and electricity production contradict Chinese government figures. In an email to Bloomberg, he said actual growth is around 7 percent.

Bank of America’s Hong Kong-based economist Lu Ting, however disagreed in a report earlier this month. While acknowledging that China’s data quality is still an issue, Lu said factors relating to other economic indicators suggest the numbers make sense. Bank of America declined an interview with CCTV in New York.

But Professor Joseph Foudy of NYU Stern agrees with Bank of America’s assessment, saying China’s GDP data is reliable. He says economists’ differing views need to be put into context because they’re still indicative of strong growth compared with other national economies.

Joseph Foudy said, "It’s a question of whether China is growing at 7 or 7 and a quarter percent versus 8 percent or so. It’s an opaque process. China doesn’t release as much data as other countries so there’s always going to be a lot of debate."

Markets are watching to see how China is holding up and how much it can continue growing despite the global economic uncertainty. With Europe’s debt crisis deepening and questions over the strength of the U.S. recovery, any weakness coming from China could be really damaging for the rest of the world.

Editor:Wang Xiaomei |Source: CNTV.CN

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