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

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency
trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza