China was the first economy to impose severe restrictions on the movement of its people, and the first to reopen, and is therefore closely watched by those eager to learn how the rest of the world might fare. Data published earlier this week showed that, officially, China’s economy expanded by a staggering 11.5% in Q2, after contracting by 10.0% in Q1. We have long been sceptical about the accuracy of China’s official statistics, and find it hard to take these data at face value. With China’s benchmark equity indices falling as the data were published, it appears that investors, too, have their doubts, either about the veracity of the data, or about the lopsided nature of China’s apparent recovery, with growth reportedly driven by manufacturing rather than consumer-facing service industries.
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