Optimism from the Chinese government’s data might go a long way to make things cheerful for investors. But, can anyone trust these numbers?
Is China back? Really?
That’s what the Chinese government says. Just as the world was worried of a potential slowdown in the People’s Republic, the economy of the world’s most populous country is on its way to 7.5% growth in 2013, according to its National Bureau of Statistics. Amazingly, that’s exactly the rate which the central government was planning for. What were the odds?
The news made traders in China quite happy. The Shanghai Composite Index shot up nearly 2% on the news, back to 2,096.47, around where it was a couple of weeks ago. News of Chinese resilience even helped to push up South Korea’s Kospi index by 1%.
The Shanghai Composite really could use the boost right now. While the government expects the GDP to grow by 7.5%, the Shanghai Composite is down about 7.5% in 2013 and is down 12% since February. Over the last four years, the index is down 29%.
Thus, some economic optimism from the Chinese government’s data might go a long way to make things cheerful for investors. But, can anyone trust these numbers?
Tackling this question is Talking Numbers contributor Enis Taner, Global Macro Editor at RiskReversal.com. Looking at the charts of the Shanghai Composite index and comparing it to the S&P 500 is CNBC contributor Abigail Doolittle, Technical Strategist at The Seaport Group.
Can the data from China be trusted? And, what does the performance of Chinese stocks say about our own market? Watch the video above to see Taner and Doolittle answer these and other questions to help you make an informed decision.