Yesterday China announced, to great sighs of relief all around the world, that their 2nd quarter GDP had grown by 7.9%. Everybody was happy that the worlds economic woes are over and we can now get back to normal. Risk on!
I heard an interesting interview on the radio last night with a Chinese academic who explained the pressures which various different Chinese government agencies are under to deliver results as expected. He also questioned the ability of a famously red-taped bureaucracy to collect data from all over a massive country such as China and then process and present it in a week. Remember that Q2 ends in June.
In other words, don’t be basing your trading strategy off of Chinese economic data.
