While many tourists and business travelers visit China each year and come back with stories that relate to population and business, the size and scope of buildings and new construction, but the smog discussion seems limited to those living in Asia, who spend more time there than others.
There are about 10 key indicators that one can view to paint a picture of the economy – but the amount of smog, or reduced amount of smog is an economic measurement that is clearly specific to China and the Beijing area. However, there are other data to watch.
Ask friends who had visited China about reductions in smog. The government is now doing everything possible to reduce the smog – especially given the aging population.
Data released last Thursday indicated, like other recent releases, that industrial output dropped from the 5.7 percent in December to 5.3 percent in January and February. Note that this is the slowest pace in 17 years.
Fixed asset investment rose 6.1 percent while retail sales increased by 8.2 percent – booth beating expectations mildly. There are several releases since December that point to a slowing economy while the government, by its own admission, has a forecast of 6.5 to 6.0 percent for GDP expansion in 2019. Note that the 6.6% GDP, actual, in 2018 was the slowest since 1990.
Clearly this economy is maturing and at the same time is falling into a period of slower growth due to excess capacity and debt. There are other factors that weighing down on GDP that are being addressed by the China government, a total of 70 types of stimulus have now been enacted.
We will be giving updates along the way in the future.