How Weak Is China?

The Real Story Behind the Economic Indicators

China's national flag is reflected on an advertisement bearing the sign of Chinese Yuan in Beijing, China, January 21, 2016. Kim Kyung-Hoon / Reuters

China’s economy is slowing. But is it still growing? China says yes, with an official growth rate of 6.9 percent in 2015 and a target of at least 6.5 percent for 2016. A CNN poll of industry economists yielded a consensus of 6.5 percent for 2016 as well, and the IMF is clinging to 6.3 percent. But many skeptics aren’t so sure. Barclays won’t go higher than six percent, Citi says five percent, and the ever-bearish Conference Board anticipates growth of only 3.7 percent in 2016, which is equal to its lowball estimate for 2015.

Indicators of real economic activity in China suggest that even 3.7 percent may be optimistic. Electricity, steel, and coal consumption all declined in 2015. Admittedly, there are special circumstances for each case. Electricity demand fluctuates depending on the weather. Steel is mostly used in construction, which is slumping as new apartments go unsold. Coal is used to generate electricity and to make steel. And

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