Business / View

Economic shift shows in lack of data

By ED Zhang (China Daily) Updated: 2015-09-14 09:27

People always complain about China's lack of transparency in economic information. But there are two types of opaqueness in a time of transition.

One type is that the government is hiding the true picture on purpose, mainly to save face and to not scare investors away from the market, but more often than not, doing that does not help. Investors can draw their own versions of the big picture and there can't be misled.

Is this what the Chinese government has been doing? From all major economic data that the National Bureau of Statistics has recently released, such as the monthly records in foreign trade and industrial output, one can obviously tell that things are bad. What officials call downward pressure is obviously hanging on, and may be getting worse in one way or another.

The other type of opaqueness is not deliberate. It is derived from a society-wide economic transition-especially when the transition no longer remains just on the government's policy paper but is also being implemented.

At the beginning of a transition, some old industries inevitably give way to budding new industries. All existing indexes look ugly, and continuously so, because they are focused on the old industrial activities, such as the use of electricity, railway throughput, the assessment of near-term sales by factory managers, and the import and export of goods.

Accompanying that, there would be mounting complaints from managers of the businesses that used to be the economy's powerhouses, moneymakers and job providers.

This is a sweeping phenomenon in China's manufacturing sector and its related retail and services.

At the same time, one may wonder, since this is not a society that really suffers from a lack of money, where all the money has gone if it is not used to invest in the old industries or to buy old industries' products. It must have some place to go.

Investing overseas is always a risky business, be it the United States stock markets or European real estate or an African farm. People are usually good at investing in their home countries. But the tricky thing is that in a time of transition, the really good opportunities often occur in the parts of the economy that don't usually have a ready index.

Not having a ready index, I have to hasten to say, does not mean there is no index or basic data for mathematical abstraction. The problem is more often that, in those areas, the useful data are not usually collected and processed into reliable information for the mass-market investors.

For example, we know how many smartphones are sold every month. In a year, there are more than 400 million new smartphones sold in China. This is old-industry data and easy to collect. But with so many smartphones, what do people do? How many hours does each user, especially each working adult, spend on it? What are the most popular applications by nation, or city, or certain class of people on an everyday basis? Answers to these questions are highly important for people to ascertain an economy's transition. But up to now, we just don't know.

Previous Page 1 2 Next Page

Hot Topics

Editor's Picks