Understanding China's Economic "Dashboard"

—— How to Penetrate the Fog of Macroeconomic Data?
Judging the operational status of a vehicle doesn't actually require disassembling the engine.
By looking at the speedometer, tachometer, fuel gauge, water temperature gauge, and glancing at warning lights, experienced drivers have a good sense of the car's condition.
The same applies to judging a country's economy.
Although the economic system is far more complex than a car, it still reveals its "status" through key indicators.
GDP, employment, inflation, fiscal policy, industry, prices, asset markets...
These are the dashboard of a nation's economy.
China is a huge and structurally complex economy,
To accurately assess its operational state, one cannot rely on a single data point, let alone be misled by superficial numbers.
This article aims to do one thing:
👉 Clarify several of the most important macro indicators
👉 From "Indicator Meaning" to "Statistical Methods"
👉 Then to "Biases, Flaws, and Suspicious Points"
👉 Help you see as clearly as possible the true pulse of China's economy
This article focuses only on the fundamentals of economic activity; other indicators will be discussed in later sections.

1. GDP: China's "Total Power Meter"
Market Sensitivity: ★★★★★
Indicator Meaning
The market value of all final goods and services produced by a country within a certain period.
Published by: National Bureau of Statistics
Release Schedule:

Quarterly Preliminary Calculation: about 15 days after the quarter ends

Annual Preliminary Calculation: January of the following year

Annual Final Verification: Announced in January of the following year

Data Credibility:

National GDP > Local GDP

Why is GDP both important and not entirely trustworthy?
GDP is the most heavily weighted and politically significant indicator in China's economy.
It not only reflects the scale of the economy but also directly relates to policy evaluation and official assessments.
For this reason——
👉 Local GDP has long had "inflation" motives
👉 Historically, "Total national GDP > Sum of local GDPs" is not a joke but a fact
Since 2000, with strengthened data collection and cross-verification in the statistical system,
the credibility of national-level GDP has significantly surpassed local data, but local figures still need to be taken with a grain of salt.
Inherent flaws of statistical methods
China's GDP mainly uses the production approach, supplemented by income and expenditure approaches:

Production Approach:
GDP = Total Output − Intermediate Inputs

Income Approach:
GDP = Compensation of Employees + Net Production Taxes + Depreciation + Operating Surplus

Expenditure Approach:
GDP = Consumption + Investment + Net Exports

Ideally, these three methods should yield the same result, but in reality, they can only "try to approximate."
The biggest issue is: services are seriously underestimated.
Small and micro services, gray services, platform economy—statistics are extremely difficult, and undercounting is common.

Core Source of the "Word Game" in GDP
In international comparisons, GDP is most prone to misuse.
Common measures include:

Current Price - Local Currency GDP (inevitably used domestically)

Constant Price - Local Currency GDP (real growth)

Current Price - USD GDP (most easily distorted by exchange rates)

Constant Price - USD GDP

PPP-GDP (Purchasing Power Parity)

👉 Different measures can lead to completely opposite conclusions
Typical examples:

Russia: Nominal GDP appears to be "getting richer and richer," but in reality, it has fallen into recession

Germany vs Japan: In 2023, Germany's nominal USD GDP surpassed Japan's, mainly due to the yen's plunge

One sentence conclusion:

Without clarifying the measure of GDP comparison, it's all just playing tricks.

2. Official PMI: The "Early Warning Light" of the Economy
Market Sensitivity: ★★★★★ (Leading Indicator)
Published by:
National Bureau of Statistics Service Industry Survey Center + China Federation of Logistics & Purchasing
High Credibility
Why is PMI so important?
PMI directly comes from enterprises, bypassing local governments,
and is the first signal to observe the economy's "temperature."
PMI =

New Orders (30%)

Production (25%)

Employment (20%)

Delivery Times (15%)

Raw Material Inventories (10%)

50 is the critical threshold:

>50: Expansion

<50: Contraction

China's manufacturing PMI covers 3,200 companies across 31 industries,
and non-manufacturing samples reach 4,300 companies.
📌 Notes:
During Spring Festival and National Day, PMI can fluctuate greatly; interpret with caution.

3. Freight and Passenger Transport Volume: The "Blood Flow Speed" of the Real Economy
Market Sensitivity: ★★
High Credibility
Freight volume is highly correlated with GDP,
and is a hard indicator to verify whether the economy is truly "moving."
GDP can be rhetorical, but trucks cannot.

4. Fiscal Revenue and Expenditure: The Government's "Throttle"
Market Sensitivity: ★★★★★
Key Focus:
👉 General Public Budget Revenue / Expenditure
👉 Fiscal Deficit Scale
The larger the deficit, the stronger the stimulus.
Historical experience:

2008: Deficit rate close to 3% of GDP, strong stimulus

Current: Fiscal space is significantly limited

⚠️ Note the Chinese characteristics:

Tight at the beginning of the year, heavy spending at the end

November–December fiscal impact on the market is significant

5. Industrial Added Value: The "Monthly Substitute" for GDP
Market Sensitivity: ★★★★★
Accounts for about 30% of GDP,
and is a core high-frequency indicator of economic activity.
The only thing to watch is whether the year-on-year growth rate deviates from expectations.
Once it does, the stock market reacts immediately.

6. PPI: The "Pressure Gauge" of Corporate Profits
Market Sensitivity: ★★★★★
PPI reflects:
👉 Whether industrial enterprises have pricing power
👉 Whether profit margins are expanding or contracting
PPI↓ + CPI↓ = Rising deflation risk

7. CPI: The "Ultimate Judge" of Inflation and Deflation
Market Sensitivity: ★★★★★+
CPI calculation is extremely complex, but the weightings are opaque,
and it has always been a controversial point.
Its real-world impact is significant:
👉 Deflation → Policy easing
👉 Inflation → Policy tightening
China's biggest current problem is not inflation,
but—anchored deflation expectations.

8. CSI All Share Index: A More Realistic Barometer of A-shares than the SSE Composite Index
Why not use the SSE Composite Index?

Limited coverage

Serious distortion due to new stock inclusion mechanisms

Long-term distortion

The CSI All Share Index covers all A-shares listed in Shanghai and Shenzhen,
and truly reflects China's stock market.
📈 Data facts:

2004 → 2025

Annualized return ≈ 9.96%

It's not that China's economy is weak; you're just looking at the wrong index.

Final Words
Macroeconomic data are not meant for "faith,"
but for cross-verification and mutual exposure.
True judgment comes from whether you understand these numbers—
how they are derived and how they might deceive you.