China's growth for real?

There have been some questions as to whether China’s still the growth giant that helped drive up oil prices in the last five years. Earlier this week economist Nouriel Roubini said he thought the country might stop stockpiling oil soon because it simply had too much:

“My concern is that China might have accumulated an inventory of commodities that is probably excessive to the growth of its economy,” he told delegates, adding that the recession would “continue to the end of the year”.

And the veracity of China’s economic data has been called into question, including the disconnect between total economic growth and electricity usage:

“During the first half of this year, industrial value-added rose a robust 7 percent, while total electricity usage fell 2.24 percent. This seemingly implies that output is growing and contracting simultaneously. The divergence has attracted attention, not least because industry is half of the economy and electricity usage is one of those bits of data that is hard to massage. Even Chinese Premier Wen Jiabao has openly said that electricity usage is the data that he trusts most.”

The latest counterpoint in the debate comes from a BP economist who says such fears are overblown.

But BP’s Chi Zhang, who was speaking at an event at the British Chamber of Commerce in Singapore, said, “in general, [the] data reflects economic growth reality,” given that China is “very manufacturing intensive and there has been a lot of industrialization and an urbanization process is going on.”
While he admitted the Chinese have been likely “taking advantage of low energy prices,” he retreated from the notion that government stockpiling was inflating prices.