There’s something fishy going on with China’s economic data—at least with those figures that are reported by the Chinese government. The reality in those numbers has always been questionable. Are the economic data compiled and reported by the Chinese government agencies correct and reliable? Are we seeing a major scam developing out of the country? While there has been lingering doubts on the reliability of Chinese data, no one has yet proven the Chinese are fudging the numbers. But you know that this is a real possibility.
I’m a Chinese bull, but I must admit I’m always concerned when evaluating the financials of Chinese companies; the proven corruption in the past several years has made me think long and hard about what and whom to trust. I have been burned by Chinese stocks, but so have many of you. The potential issues with the Chinese economic numbers may also be true. Case in point: in the first quarter, China’s gross domestic product (GDP) growth was 7.7%, according to the National Bureau of Statistics. That percentage was down from 7.9% in the fourth quarter.