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Does China’s Monthly Macro Data Still Matter?
There's something odd about suggesting that top-tier macro data out of the world's second-largest economy barely bears mentioning, but here I am suggesting just that.
There was a time not so long ago when I'd sit around and wait on China to release monthly activity data, as though there was some urgency in briefing readers in real-time on a set of figures tallied by Xi Jinping's beholden bureaucrats.
That seems ridiculous now. The data's impossible to parse expeditiously, which means about the
China is still keen on Taiwan isnt it? If it does try to take it by force Putin-style, do you think there’s a very high likelihood that Chinese equities are delisted from western exchanges, similar to Russian equities? That is my main concern
Well, I suppose it depends on how Xi plans to go about it. That is: Would it be a blockade, or some kind of hybrid approach? Or would it be an all-out, whole-of-military invasion? If it’s the latter, then the odds of the US stepping in are probably at least 60/40 in favor of intervention. If a shooting war ensues between the US and China and it’s not over in — you know — a week or two, then China and everything to do with it (including the stocks) will probably be subject to sweeping investment restrictions. You have to believe Treasury would demand the immediate exclusion of Chinese equities from EM benchmarks, etc., because in war time, every dollar that goes to any Chinese corporate would be subject to diversion by the Party to the PLA. I don’t know how Treasury would handle China’s reserves, but suffice to say anyone caught facilitating transactions with SAFE or its surrogates would be sanctioned severely.
Got it, thanks.
I find China’s import/export numbers to be the most interesting. For one thing, those are the hardest numbers to fudge, since other countries can verify their side of the data. While a few countries like Russia might be happy to lie about things, most countries would call them out on falsified numbers, even if only inadvertently. After all, if Vietnam reports $10b in bilateral trade while China reports $20b, economists around the world will notice the discrepancy immediately, even if Vietnam wasn’t trying to expose anything. And while China could always coordinate with Vietnam, that vastly increases the complexity of lying while simultaneously increasing the chance of exposure.
Moreover, the numbers actually tell you something useful. Imports are a strong signal of domestic demand, while exports tell you as much about the health of world’s economy as China’s.
Finally, there was one thing I found interesting last year. When China opted to stop reporting youth unemployment, it sent an interesting signal: given the choice between just making shit up and not reporting the data, they opted to not report. China could have always just made up healthier looking numbers, and who would gainsay them? The fact that China choose silence over making shit up actually improves the trustworthiness (at least the perception thereof) of other data China publishes.