China's growth real - Frank Holmes

China’s stronger-than-expected GDP growth of 7.9 percent in the second quarter has made some market pundits skeptical of the China story. They claim that the ruling party has “massaged” the data in order to project stability.

The most widely cited negative point has been the 3.35 percent annual decline in electrical power generation during the first half of 2009.

However, we believe the decline in power usage is a response to China’s nationwide efforts to increase energy efficiency and reduce greenhouse gas emissions from the country’s power plants and factories. The original goal from five years ago was to cut energy intensity by 20 percent by 2010 so a decline was expected.

---Frank Holmes, 8.11.09