- What Rail Freight Volume just Said About China
by Wolf Richter, http://wolfstreet.com/
Mandating top-down economic growth is not enough.
The Chinese government is getting nervous about the numbers and is insisting, top-down, on obtaining economic growth of 6.5% to 7% this year, one way or the other.
China’s cabinet has sent inspectors fanning out to provinces across the country to “keep economic growth within a reasonable range and ensure the main objectives and tasks of this year’s economic and social development will be completed,” according to Xinhua news agency, cited by Reuters. Because, apparently not all of China was playing along….
Some regions and government departments are not coordinating their policies well and some officials are lazy in their work, Xinhua said.
These inspectors, in addition to keeping up the pressure on growth, are also supposed to make sure that major policy measures are implemented along with “supply-side structural reforms” – cutting, for example, the massive and destructive overcapacity in the steel and coal sectors and the power generation sector. And these inspectors also supposed to support investment projects and innovations.
The government must have taking a good look at the rail freight data and is getting desperate, and it’s going to force official growth to happen, because the rail freight data, one of the key gauges of the goods producing economy, is dismal and contradicts the official growth story.