Seven straight months of Chinese economic contraction suggested by one leading indicator means that the world’s second largest economy is probably in decline – although expert Gordon Chang took it one step further Friday.
“It’s also probable,” he said on CNBC’s “The Kudlow Report.”
Chang, author of “The Coming Collapse of China” and a Forbes contributor, held a bearish outlook that looks beyond the official Communist Party line.
“If you look at April, electricity production increased by 0.7 percent, and because the growth of electricity historically outpaces the growth of the underlying economy, that means they can’t be growing more than zero,” he said. “There are other reliable indicators that say less than zero.”
Chang noted that “China has been real trouble” since August and seriously faltering in the first quarter, possibly posting an economic growth rate of “zero or worse” in April.
For the United States, he argued, it doesn’t pose as big a threat as many people think because of its trade deficit with China.
Chang said that not all of China’s numbers are bunk.