GO
Loading...

Fuzzy numbers? Real China growth only half: Expert

The official economic numbers that China released Monday are dramatically overestimating growth there, the author of "The Coming Collapse of China" told CNBC.

The government said the economy grew 7.5 percent year-over-year in the June quarter—marking the second- straight quarter of slowing growth.

(Read More: China's economy slows for second straight quarter)

"It's not growing in the sevens. It's probably growing in the threes and the fours," Gordon Chang said in a "Squawk Box" interview. "When you look at electricity statistics, manufacturing surveys, price indices, trade data, all of this is looking very, very bad."

China's full-year growth was 7.8 percent in 2012, and the government targets growth of 7.5 percent for this year, which would be the slowest in about two decades.

Last week, the Chinese government reported dismal trade numbers for June—with both exports and imports contracting against forecasts for a much better performance compared to May.

(Read More: Why China delivered such a big miss in trade data)

Chang said China is nearing the end of its "export-heavy, investment-led" growth model, and "leaders can't make the changes necessary to get consumption growing" because reform-minded politicians are out-numbered.

"The hardline, anti-reformers have at least four of the seven seats—maybe even as many as five or six" seats on the Politburo Standing Committee, which is the "apex of political power" in China, Chang said. The only known reformer, he said, is Premier Li Keqiang.

By CNBC's Matthew J. Belvedere. Follow him on Twitter @Matt_SquawkCNBC.

Contact World Economy

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    › Learn More*