Achieving growth targets is a matter of political importance in China, and there's evidence that someone somewhere is fiddling with the numbers. For one thing, China's No. 2 leader, Li Keqiang, admitted as much in 2007. A diplomatic cable released to the public by Wikileaks quoted Li as saying during a dinner that GDP figures were "man-made" and therefore unreliable. Li said he personally looked at electric consumption, rail cargo and loans disbursed for a clue to how the economy was operating, rather than official growth figures. "All other figures, especially GDP statistics, are 'for reference only,' he said smiling," the cable reads.
"The problem with the Shanghai Composite is that 94 percent of Chinese stocks trade at higher valuations than the index, a consequence of its heavy weighting toward low-priced banks. Use average or median multiples instead and a different picture emerges: Chinese shares are almost twice as expensive as they were when the Shanghai Composite peaked in October 2007 and more than three times pricier than any of the world’s top 10 markets."
“In economics, things take longer to happen than you think they will, and then they happen faster than you thought they could.”
"Despite the economy crying out for it, the Chinese leadership is not ready for this," said Buiter, the man who coined the term "Grexit" during the Greek debt crisis.
"Driving the global selloff is the concern that the once-highflying Chinese economy may be slowing significantly, which has triggered steep losses in global stock markets, commodities and emerging-market currencies. China’s surprise currency devaluation two weeks ago—which could make its exports more competitive—and a string of weak data signal the economy may be feebler than expected, despite a campaign to rev up growth that has included interest-rate cuts and measures to boost lending."
"Around $5 trillion has been wiped off global equity markets since the yuan devalued earlier this month. That shift, allied to a string of bad economic numbers and a botched official attempt to halt the slide in Chinese bourses, has fuelled fears that the world’s second-largest economy is heading for a hard landing. Exports have been falling. The stockmarket has lost more than 40% since peaking in June, a bigger drop than the dotcom bust."