woensdag 8 januari 2014

China's Power Consumption/Output Vs. Chinese GDP

China becomes increasingly important in our world. It's advisable to follow China's GDP growth because everything depends on it. If China does well, the whole Asian continent will do well, commodities like iron ore, gold, silver, copper will go up. The Australian economy and its currency depend on China. Emerging markets like Vietnam, Taiwan, Thailand, etc... will do good.

To predict Chinese GDP growth, we can look at the monthly Chinese power output/consumption numbers because there is a clear correlation here. If the yoy Chinese power consumption (Chart 1: red line) goes up, the GDP growth goes up.

Another way to predict China GDP is to look at the credit impulse.
The China credit impulse is a leading indicator for China GDP with a 1 year lag.

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