STOCK MARKET WATCH -- Thursday, 21 February 2013

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32. CHINESE PUZZLE

http://www.newyorker.com/talk/2013/02/25/130225ta_talk_schmidle

FFor a city enthralled by intelligence work, like Washington, D.C., provocative intellects are a rare breed. So Leland Miller didn’t expect a warm reception when he rolled into town recently, declaring that everything everyone thinks he knows about China’s economy is wrong. Miller had no sooner introduced himself at the Atlantic Council, a think tank, when the audience, made up mostly of middle-aged white men in dark suits, stiffened.

Miller was talking about his new publishing project: an insider’s guide to the Chinese economy for investors. A thirty-six-year-old lawyer with a long chin and product-perfect hair, he studied Chinese history at Oxford and speaks Mandarin. A couple of years ago, he and some China-minded friends from Wall Street and Washington arrived at a conclusion. “The game is completely rigged,” he said. Every policy wonk and financial adviser interested in China had to rely on economic data provided by the Chinese government. “There is no way to validate whether any of the Chinese numbers are right or wrong,” he said.

So Miller devised a solution, which he calls the China Beige Book. It’s modelled on the U.S. Federal Reserve’s Beige Book, a report, published eight times a year, that gives a regional, incremental snapshot of the American economy. The latest edition of the U.S. version came out last month. Curious about used- and new-car inventories in Chicago? They’re picking up. Traffic on the Mississippi River? Delays, because of low water levels. Hog prices in Minnesota? They’re down.

Miller set out to cull similar data and trends from China, and, a year ago, he dispatched pollsters around the country to ask questions. He tabulated and analyzed the results by quarter. In the third quarter, he determined, among other things, that instances of worker unrest far exceeded what was reflected in reported data, and that automobile manufacturing had dipped in every region except the southwest. In the fourth quarter, furniture sales slowed in Inner Mongolia and the north, and investments in the Central Region’s food sector increased (even after a British firm cancelled its plan to build a foie-gras plant following a protest campaign backed by the actor Roger Moore). The Atlantic Council, which is chaired by Chuck Hagel, the Secretary of Defense nominee, had asked him to project where China was heading in 2013.


Read more: http://www.newyorker.com/talk/2013/02/25/130225ta_talk_schmidle#ixzz2LY1Iahyd