The Markets
Isn't it remarkable that China's growth is so consistent?
A columnist from The Washington Post once opined that China "produces an astonishing number of astonishing numbers." Last week's GDP announcement, which helped push markets higher, may fall into that category.
China's official statistics agency reported the country's gross domestic product (GDP) grew by 6.7 percent during the first quarter of 2016. That didn't come as a big surprise because it's smack-dab-in-the-middle of the official Chinese government target of 6.5 to 7.0 percent GDP growth. The target was set last year when the government adopted its most recent five-year plan.
Not everyone thinks China's official statistics are on the money. The Conference Board (TCB), an independent global research association, has found:
"...an upward bias in the previously published GDP growth series of, on average, 2.6 percentage points per year since the start of Deng Xiaoping's so-called "reform era" that began in 1978, this percentage has not been constant over time. In fact, our alternative series indicates much larger volatility in the year-on-year estimates (sometimes even showing faster growth rates than the official estimates), suggesting that the impacts of external and internal shocks on the Chinese economy are much more pronounced than the official statistics convey."
In other words, China's growth may not be as steadfast and unwavering as the country's government would have us believe.
TCB estimated China's GDP grew by 3.7 percent during 2015, which was significantly lower than the Chinese government's 6.9 percent growth estimate. In fact, TCB expects the Chinese economy to grow by 3.7 percent in 2016, too. It's not 6.5 percent, but it's solid growth.
Data as of 4/15/16
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1-Week
|
Y-T-D
|
1-Year
|
3-Year
|
5-Year
|
10-Year
|
Standard & Poor's 500 (Domestic Stocks)
|
1.6%
|
1.8%
|
-1.2%
|
10.3%
|
9.5%
|
4.9%
|
Dow Jones Global ex-U.S.
|
3.3
|
0.7
|
-13.0
|
-0.6
|
-1.6
|
-0.3
|
10-year Treasury Note (Yield Only)
|
1.8
|
NA
|
1.9
|
1.7
|
3.4
|
5.0
|
Gold (per ounce)
|
-1.0
|
15.5
|
2.9
|
-4.2
|
-3.6
|
7.2
|
Bloomberg Commodity Index
|
1.7
|
2.3
|
-20.8
|
-14.8
|
-14.0
|
-7.4
|
DJ Equity All REIT Total Return Index
|
0.2
|
6.0
|
7.2
|
9.1
|
11.4
|
7.2
|
S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT Total Return Index does include reinvested dividends and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.
Sources: Yahoo! Finance, Barron's, djindexes.com, London Bullion Market Association.
Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.
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