By Dan Denning, Daily Reckoning.com.au:
How long is a piece of string? It’s as long as the Chinese government says it is! In today’s Daily Reckoning, we wonder whether statistics or prices can be trusted any longer.
And to remind you of what’s at stake in this great debate about the veracity of China’s economic data figures and the viability of its growth model, there’s this from the Chanticleer column in this weekend’s Australian Financial Review:
‘The slowest rate of economic growth in China since the global financial crisis is not a reason to panic but investors ought to be dusting off scenarios that involve a hard landing [like China's Bust].
‘It is better to have at least thought about the implications of a worst-case scenario rather than be taken by surprise when markets react to lower Chinese demand for Australian commodities…
‘The majority of Australians in default superannuation funds will have a high exposure to resources and will be vulnerable to a China slowdown. In fact, those with a typical default fund should brace themselves for negative super returns for the year to June 2012 of between 5 and 7 per cent simply because of their exposure to companies such as BHP Billiton and Rio Tinto.’