CKGSB Professor of Finance Gan Jie features in the first of a series of articles by China Daily on the macro-economic policies that will help China change from an export-led economy to one driven primarily by consumer spending.
Transaction data from China UnionPay and Alibaba could be used as a gauge for the strength of China's expanding service and consumption sector as traditional indicators become increasingly irrelevant, China’s premier English-language newspaper China Daily reported on October 15. The article, by Beijing-based reporter Zheng Yangpeng, is the first in a series of news analysis pieces on the macro-economic policies that will help China change from an export-led economy to one driven primarily by consumer spending.
CKGSB Finance Professor Gan Jie explained to China Daily that, compared to industrial firms, the service sector is much more diverse and heterogeneous, and so gauging it in the same way is difficult. She said that, notably, the sampling of different enterprises can affect the reading. China Daily went on to note that official and private PMI results often suggest different directions in the economy, as the former is based more on SOEs while the latter focuses more on small private firms.
Prof. Gan Jie, who publishes her own large-scale quarterly survey on the state of China’s industrial economy through CKGSB’s Center on Finance and Economic Growth, said, "There is always a conflict between the official PMI and private PMI," adding that the question remains whether the economy is getting better or worse.
"Input of industrial firms is homogeneous, such as electricity. Other metrics such as new orders, inventory levels, supplier deliveries, can be applied to firms in various industries. In the service sector it is difficult to find indicators that simultaneously apply to education, healthcare and tourism," Prof. Gan said.
To read the China Daily article in full, please click here.