Chinese Premier Li Keqiang was quoted as saying that he preferred to use a range of direct indicators of economic activity (as opposed to GDP) when assessing economic growth (See The Economist, Dec 9th, 2010). Come on', 'There will be a recount' in Georgia. The Li Keqiang index is more relevant than official GDP for almost every commodity and currency that we tested.
Nicholas Lardy, a seasoned China watcher from the Peterson Institute of International Economics, explains this change convincingly. Ironically, the most famous and used alternative measure is named after China's Premier, Li Keqiang. When it comes to measuring the progress in structural reform it is much harder.
We know this thanks to Wikileaks. Back in April last year, Li reiterated that the unemployment figure, urban and rural income levels and structural reform were the three key goals of the Government. Li, when he was the party secretary of Liaoning province, told the American ambassador to China at the time that he didn't trust the official economic data.
'Stop the count' or 'count the votes'? “Li Keqiang” Index” highly related to economic growth rate Observation and analysis of economic situations in accordance with such indexes as industrial power consumption volume, railway freight volume and medium and long-term loan balance have a theoretical basis in economics and complies with practical conditions of China’s economic development.
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In fact, when the National Bureau of Statistics releases its data it’s usually greeted with derision and disbelief.
China watchers need to observe the new index more carefully rather than obsessing over monthly manufacturing figures.
Peter Cai is a research fellow at Lowy Institute for International Policy. It has identified 113 areas of reform and categorizes them into three areas: the fast lane, the slow lane and the standing zone.
Some old engines are sputtering and new ones are firing up. Video, 00:01:22Trump claims 'interference', but without evidence, One-minute World News. China does not have monthly data on the growth of the services sector and monthly data on retail sales may not reflect the true state of private consumption. Video, 00:03:05, China seeks to rebalance its economy. He thinks this is making the country uncompetitive.
The Li Keqiang index showed a much sharper slowdown in 2015 than official GDP.
Instead, he looked to figures such as electricity consumption, railway freight and bank loans as more reliable indicators. Come on', 'There will be a recount' in Georgia.
The Li Keqiang Index Is Dead, Long Live the New Li Keqiang Index by Peter Cai Paul Krugman says all economic data is best viewed as a peculiarly boring genre of … Video, 00:01:11, Trump claims 'interference', but without evidence. For example, he said at the Hamburg Summit of the China-Europe Forum in 2014 that the Government was prepared to accept lower growth if the following conditions were met: strong employment growth, stable consumer prices, wages increases and better environmental protection.
Primeiro-ministro da República Popular da China, Creative Commons Attribution-ShareAlike 3.0 Unported License, This page is based on the copyrighted Wikipedia article. Imaginative economists, fund managers and commentators have developed a variety of alternative measures of gauging the Chinese economy.
And the index showed a much stronger rebound. However, as the country's services sector contributes two thirds of economic growth, it begs the question whether the index is still relevant.
Some suspect the figures look worse than the official urban registered unemployment rate.
At the end of 2015, the services sector accounted for more than 50 percent of GDP. So, it seems that we need a new index to reflect the changing reality in China. Paul Krugman says all economic data is best viewed as a peculiarly boring genre of science fiction, but Chinese data is even more fictional than most. We have come to a point, where this data is equally important for us.”. He is also a journalist with Business Spectator and the Australian, focusing on China’s political economy. They're still counting the votes' Video, 00:03:14'What do you mean? Índice Li Keqiang - Li Keqiang index Da Wikipédia, a enciclopédia livre Índice Li Keqiang ou índice Keqiang ( chinês : 克强指数 ), criado pela The Economist para medir a economia da China através de três indicadores, como teria preferido por Li Keqiang , atualmente o Primeiro-ministro da República Popular da China , como melhor indicador econômico do que os números oficiais do PIB . When Li confessed to the American ambassador about his lack of confidence in economic data, the services industry accounted for 41.89 percent of GDP.
The Li Keqiang index is falling from favor as a way of tracking the Chinese economy, just when investors are in real need of insight.
Índice Li Keqiang ou índice Keqiang ( chinês : 克强指数 ), criado pela The Economist para medir a economia da China através de três indicadores, como teria preferido por Li Keqiang , atualmente o Primeiro-ministro da República Popular da China , como melhor indicador econômico do que os números oficiais do PIB . Video, 00:01:02One-minute World News, Biden: 'Each ballot must be counted' Video, 00:01:45Biden: 'Each ballot must be counted'. Expanding demand for services such as healthcare, education, entertainment and travel generates little or no demand for industrial goods, electric power or freight transport. The 2016-17 rebound, however, may be giving way to renewed weakness.
Analysts could use the Caixin index as a proxy for measuring the progress in reform. It is disappointing to note that only twenty-three areas of reform are moving in the fast lane, seventy-four areas are in the slow lane and sixteen reform areas are not moving at all.
So the Li Keqiang Index makes a lot of sense when applied to China's industrial economy rather than its growing services economy. The BBC's Linda Yueh explores what has become known as the 'Li Keqiang Index', an alternative measure of the country's economic growth based on electricity consumption, railway freight and lending.
Video, 00:01:22, Trump claims 'interference', but without evidence, Biden: 'Each ballot must be counted' Video, 00:01:45, 'Stop the count' or 'count the votes'? He argues, in the Economist no less, that the index is less relevant nowadays than before. World Economics 'Li Keqiang' Index .
The BBC is not responsible for the content of external sites. Let's start looking at China's unemployment figure which, although it looks good on paper, is deeply flawed.
Economists need a new index to reflect the changing reality in China. Video, 00:01:49, China's economy in electricity and freight, Up Next, Graduates chase the 'Chinese Dream' Video, 00:02:17, Chinese bikers ride economic growth. The 2016-17 rebound, …
One of the best performers is consumer spending, which has been growing in double digits this year. They're still counting the votes' Video, 00:03:14, 'What do you mean? “The services sector has grown continuously more rapidly than GDP, and its share of the economy now exceeds that of industry. O 'índice Keqiang' também é usado por Haitong Securities lançado em 2013, sugerindo desaceleração do crescimento econômico da China desde o início de 2013.
Video, 00:01:05'Stop the count' or 'count the votes'?
Over the same period, the manufacturing sector dropped to 41 percent of GDP. Video, 00:01:49China's economy in electricity and freight, Up Next, Graduates chase the 'Chinese Dream' Video, 00:02:17Graduates chase the 'Chinese Dream', Chinese bikers ride economic growth. Video, 00:01:50, 'Look at us, we matterâ Video, 00:01:29, 'Happy day' for Pelosi, but Graham says 'fight hard' Video, 00:01:56, 'Happy day' for Pelosi, but Graham says 'fight hard', 'All of a sudden Trump's losing?
China’s wage increase looks good.
“One by-product is a fall in the relevance of indicators such as power consumption, railway cargo volume and new bank credit in gauging economic performance,” he says.
And the index showed a much stronger rebound. Fortunately, Caixin, a respected business publication in China, has developed an index that gauges the progress of reform. The Nobel laureate is not the first, and certainly will not be the last, to point out the unreliability of Chinese data. The Economist created an index in honor of him and the measure has gained popularity over the time.
However, the Chinese Finance Minister has repeatedly expressed his concerns over the rapidly raising wages in China. They're still counting the votes'. I. So what should we look out for? If we use the new Li Keqiang Index, wages and retail sales both look strong, while reform has more or less stalled and we are a bit unclear on the state of China's labor market. Maybe we should start using figures from e-commerce platforms such as Alibaba and JD.com in order to better understand the dynamism of China's internet-savvy shoppers.
© Copyright 2020 Center for the National Interest All Rights Reserved. Beijing knows this and wants to change the collection method in line with international practice. The Li Keqiang index showed a much sharper slowdown in 2015 than official GDP. Both city folks and rural laborers are experiencing strong income growth. So, the overall picture is less gloomy but nevertheless very challenging for Beijing to handle.
From July 2015 onwards, 15,000 interviewers have been surveying 120,000 households every month to gauge the true state of the employment situation.
Video, 00:01:50China seeks to rebalance its economy, 'Look at us, we matterâ Video, 00:01:29'Look at us, we matterâ, 'Happy day' for Pelosi, but Graham says 'fight hard' Video, 00:01:56'Happy day' for Pelosi, but Graham says 'fight hard', 'Please have patience' Video, 00:00:44'Please have patience', 'All of a sudden Trump's losing? This is a key driver of the current consumption boom.
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Video, 00:01:11'There will be a recount' in Georgia, Trump claims 'interference', but without evidence. Come on' Video, 00:02:05'All of a sudden Trump's losing? Li recognizes the problem and says “the macro-economic policy of many countries is set according to the surveyed unemployment rate. Li, who has a doctorate in economics, points out consumption is now responsible for 60 percent of growth in China. Come on' Video, 00:02:05, 'All of a sudden Trump's losing? This article first appeared in the Interpreter.