Economist Argues GDP is Wrong Metric to Measure China’s Growth

Recent bearishness surrounding China’s growth is just another “false alarm” and investors are focusing on the wrong data points to assess the outlook for the world’s second biggest economy, said well-known economist Stephen Roach.

He argues that industry watchers should stop the obsession with growth domestic product (GDP) figures for China, and instead focus on consumption data, which he says is a better measure for an economy in the midst of rebalancing.

“The composition of GDP is probably the worst metric to use in assessing early-stage progress on economic rebalancing,” the Yale University professor and former non-executive chairman of Morgan Stanley Asia said in a note published Monday.

“Eventually, of course, the mix of GDP will provide the acid test of whether China has succeeded. But the key word here is ‘eventually,'” he added.

via CNBC

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