China growth coming in lower

 

ChinaNow is a real-time, alternative measure of Chinese real GDP designed to capture business cycle dynamics in China that are not readily observable in official GDP data.  The authors employ a dynamic factor model (DFM) that draws on a broad set of high-frequency indicators informative about the Chinese economy and its business cycle.

Many are skeptical of the official stats coming out of China. In addition to methodological issues, these GDP data are politically sensitive; therefore, it is important to identify alternative growth indicators. The ChinaNow index appears to closely match official figures but provides more timely and higher-quality data, particularly during periods of slowdown. 

If there is a slowdown in China, there are stronger incentives to push exports at lower prices to keep factories humming. Hence, China's domestic growth has a strong impact on the rest of the world.