EU In Recession, US Entering Recession And China Is Lying About Its Growth

The emerging markets, especially China, are showing signs of a major slowdown. Indeed, recent revelations have made it clear that China’s slowdown is in fact much worse than expected:

Record-setting mountains of excess coal have accumulated at the country’s biggest storage areas because power plants are burning less coal in the face of tumbling electricity demand. But local and provincial government officials have forced plant managers not to report to Beijing the full extent of the slowdown, power sector executives said.

Electricity production and consumption have been considered a telltale sign of a wide variety of economic activity. They are widely viewed by foreign investors and even some Chinese officials as the gold standard for measuring what is really happening in the country’s economy, because the gathering and reporting of data in China is not considered as reliable as it is in many countries.

Indeed, officials in some cities and provinces are also overstating economic output, corporate revenue, corporate profits and tax receipts, the corporate executives and economists said. The officials do so by urging businesses to keep separate sets of books, showing improving business results and tax payments that do not exist.

The executives and economists roughly estimated that the effect of the inaccurate statistics was to falsely inflate a variety of economic indicators by 1 or 2 percentage points. That may be enough to make very bad economic news look merely bad. The executives and economists requested anonymity for fear of jeopardizing their relationship with the Chinese authorities, on whom they depend for data and business deals.

For those of us who have been skeptical of the China “miracle,” these revelations are nothing new. After all, China’s infrastructure projects include ghost towns…

…as well as blowing up buildings just to build new ones in order to record “growth”

As one of the most architectural productive country, China aggregates 2 billion m2 of new building area every year, consuming about 40% of the world’s concrete and steel. However, on the flip side of the new building fever, there lie the rubbles and remains of other “older” buildings: people tear down four-star hotels to build five-star ones and bulldoze newly developed construction sites before they are even finished. Lots of young strong buildings are down, fulfilling their unnatural destiny in the roaring noise of blasting. (Source from ifeng.com and people.com.cn)

http://www.chinahush.com/2010/09/24/china’s-bizarre-phenomena-buildings-die-unnaturally/

Some analysis I’ve read puts China’s actual Debt to GDP north of 200% (the dodgy debt is hidden in State Owned Entities and remains off the “official” books.

The problem is… by now everyone knows that China’s data is “suspect” but no one seems to know just how suspect it is. And given that Europe is in a recession (confirmed) while the US economy is entering a recession again (not “officially” confirmed yet, but it is) in its weakest state in the post-WWII era, much of the world economic growth story is tied to China.

So if China’s growth is slowing and potentially even recessionary… where is the global growth engine going to come from?

Obama is raising hell with the White House staff right now: "Why the hell didn't you ignoramuses think of this!"

Ha...the Greeks beat the Chinese to it....

The officials do so by urging businesses to keep separate sets of books, showing improving business results and tax payments that do not exist.

The Italians invented Double Bookkeeping.

The Greeks invented "tripple bookkeeping"

First set of books shows the true state of the business....

Second set of books to show spouse ...sans "funny money" for mistress

Third set of books for the tax inspector....

Que video of Hitler just finding this out.....

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