Following up on Saturday's "
The Gold Standard of Economic Activity Statistics, Electricity Production, Is Being Faked In China". If it turns out that the Times has another Jayson Blair in the newsroom I'm going to get crabby.
I was going to go over to Pinch Sulzberger's but decided against it when I saw that NYT closed at $6.66 yesterday. Mr. S. has overseen the destruction of 86% of the Ochs/Sulzberger family net worth and probably has things other than Chinese electricity production on his mind.
The Times has not responded to the Clusterstock report. Here's the original Times
piece.
From Clusterstock:
Top Chinese Economist Blasts New York Times Report About Fabricated Data
Early this past weekend New York Times reporter Keith Bradsher reiterated a popular belief that Chinese data is concocted to mask the extent of China's economic slowdown.
Bradsher wrote "officials at all levels of government are under
pressure to report good economic results to Beijing" since this is the
first time in about 23 years when a slowdown has coincided with a
leadership transition.
And Bradsher focused in large part on falsified power data to make his argument.
Now, Ting Lu, China economist for Bank of America Merrill Lynch,
is out with a note in which he says while China's slowdown has been
worse than anticipated, and while "we" have also complained about data
quality, "we have some very different views from what the NYT article
claims", which "stirred markets today".
Ting first questions the veracity of the Bradsher's sources and some basic facts,
saying he cited only one economist but later "extrapolated that to
'Western economists' and questions who this Western economist with ties
to the NBS is. Moreover, he points to the part of the article that says
“cities and provinces across the country had reported flat or only
slightly rising electricity consumption”. And points out that in May
Shanghai, Hubei and Jiangxi, officially reported negative YoY growth of
power consumption.
He then questions the logic since, "China's local
officials might be incentivized to over-report some macro indicators
such as GDP and FAI, but they have little incentive to over-report use
of energy including electricity as Beijing imposes increasingly
restrictive regulations on energy use per unit of GDP on local
governments." Further, Ting writes that leadership transitions in most
regions are done and GDP growth is not as relevant for provincial
governors to get a spot in Beijing
Ting also says the room for manipulation isn't as big as the New York Times piece suggests when it cites a "top corporate executive" who says that electricity consumption in Shandong and Jiangsu fell over 10 percent YoY in May....MORE
