According to the Economist, to better understand China’s rapidly deteriorating economy, analysts are turning to less traditional indicators instead of relying on official economic figures.
For example, the daily movement index provided by Baidu showed a sharp decline of more than 48% over the seven days ending April 3 compared to last year.
Ting Lu, Chief China Economist at Nomura, told the Economist that he used subway trips and other indicators to evaluate the hustle and bustle between cities.
According to Ting, subway travel in China’s eight largest cities plummeted 34% from last year. The number of subway trips in Shanghai plummeted by 93%, making the situation in the city worse than in 2020.
The most important concern for Ting Lu is the tracking of the economic distribution system of courier and truck data.
As of April 1, the courier service index for courier companies fell by nearly 27% in seven days from a year earlier. In addition, Wind data reported a reduction of 12.8% of the road freight index.
According to the Economist, unconventional indicators are more valuable in China due to the public’s skepticism of official data.
In addition to Ting Lu’s approach, forecasters were finally brave enough to predict negative growth for the first quarter of 2020 after accumulating evidence from high-frequency data. As reported by Business Insider, China’s GDP shrank by 6.8% in 2020.
Ting Lu recently analyzed 20 non-traditional indicators for China. He said that GDP growth would worsen if eight out of ten indicators went down.
At the moment, Ting believed that the direction was clear.