Wall Street Journal reports:
Stephen Green, China economist at Standard Chartered, says the official numbers
reflect an underestimate of inflation, resulting in an overestimate of real
growth. Using an alternative measure of service sector inflation, Mr. Green
calculates GDP growth at 5.5% in 2012 – putting the world’s second-largest
economy in hard landing territory.
Mr. Green’s choice of a higher deflator – a price index used to strip
inflation out of the calculation of growth – makes some sense. Prices for
services like healthcare and education are rising fast. Still, Mr. Green says
that 5.5% is a guesstimate rather than a firm conclusion.