I’ve long been on the record as not trusting Chinese government statistics (some examples here, here here, here, here, here, here, here, here here, here, here, here, here, here, here, and here), but this is a twist I hadn’t previously noticed:
A useful and basic rule of thumb about international economic statistics. Never, but just never, believe nor pay attention to anything about the Chinese economy for the first quarter of the year. No, this isn’t because our inscrutable bretheren dissemble more or less at this time of year, it’s not because their statisticians spend January drunk or hungover (unlike our own), it’s because the Chinese New Year obeys its own little calendar.
The modern Chinese New Year begins on the first new moon between January 21st and February 20th. Earlier calendar systems were more complicated:
Chinese five phases and four seasons calendar, used during the Zhou dynasty (c. 1046 BC-256 BC).
Image by Orienomesh-w, via Wikimedia Commons.
Well, OK, so if this was a western country that really celebrated the New Year (say, Scotland) then everyone would be back at work 48 hours later. However, the Chinese New Year is also the start of the two week holiday. Sorta a mixture between American Thanksgiving (you WILL eat at your mother’s table or a close simulacrum of it) plus a Wakes Week (English industrial towns would shut every single factory so that all could get away to the beach for a week. Well, beach not so much, Skegness maybe). The combination of the two means that near every factory in the country shuts for a couple of weeks as the largest migration in history takes place. All those migrant workers heading back to Mom’s dumplings.
If this all took place at the same time each year then our economic statistics would take account of it just fine with our seasonal adjustments. Just like we do with Christmas. We know very well that hundreds of thousands get hired for temporary jobs packing and delivering just before, get laid off immediately afterwards. We don’t see that reflected in the unemployment numbers because we’re not interested. We want to see trends, not known seasonal variations. So too with output and all that – many European factories do close in that week after Christmas. We don’t measure a drop in GDP then because we know about it therefore ignore it.
So Chinese official economic statistics are even less likely to correspond to reality during the first quarter than at any other time of the year.
