Last month, CRT examined China’s GDP data and reached the conclusion that while the government’s tactics for calculating growth have improved, there is still room for significant growth. Some claim that electricity statistics are a better judge. Electricity output has an important role in China’s economic data, as officials may lie, but volts do not. Therefore, electricity is viewed as a reliable proxy for economic growth.
Adam Roseman of ARC Investment Partners agrees. In a company newsletter he wrote: “The manufacturing and industrial sectors are major consumers of electricity; changes in output should be reflected in changes in electricity production. Over the last several years, growth in electricity output has moved more or less in line with growth in industrial output.”