Rail Traffic Confirms That The World's #2 Biggest Economy Is Starting To Strengthen Again

Many economists and observers are sceptical of the validity of much of China’s economic data.  Apparently, they are less sceptical of the electricity production and consumption and freight volume.  These times series are often used to get a better handle of Chinese growth.

This Great Graphic comes from Also Sprach Analyst.  The first chart shows various modes of goods transportation and China’s GDP.  The best fit is with freight traffic. 

The second chart focuses on the simply the rail cargo volume.  The volume of China’s rail freight in October was 3.2% lower on a year-over-year basis (was -5.4% in September), but on a month-over-month basis increased by 5.8%.  

The key take away is that the rail traffic lends credence to the recent series of data that suggest the world’s second largest economy is stabilised after slowing for the past seven quarter.  Globally speaking this is a small offset to the prospects of weaker US, Europe and Japanese growth profiles. 

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