Chart of the Week: China M2 Money Supply vs. Chinese GDP

Is China a leading or lagging indicator? (Possibly both).

China M2 Money Supply vs. Chinese GDP
click for larger chart


Source: Michael

Money Supply softening in China could precede a slowdown in the manufacturing giant’s economy. The upside is that Chinese Central Bankers remain as concerned about inflation as the Fed. The downside is they probably are just as impotent to stop it.

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Quote of the Day:

"I prefer to be true to myself, even at the hazard of incurring the
ridicule of others, rather than to be false, and to incur my own

~ Frederick Douglass

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What's been said:

Discussions found on the web:
  1. spencer commented on May 2

    With Chinese growth so extremely dependent on investment the economy could slow a lot quicker then may believe.

  2. dsquared commented on May 3

    Oop. Negative Marshallian “k” is usually very bad news in Asia.

  3. zac commented on Sep 11

    actually, china will do a lot better job managing the soft-landing than japan ever could– the reason is that China is from the getgo an economy and country that understands interdependencies and its place in a larger sphere of existence that the japanese were too closeminded to see.

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