Following up on an earlier post, Zero Hedge reports that the Chinese economy has goosed it's reported productivity by channel stuffing, or the production of goods that are unwanted and unsold.


  "First, we find, what has been painfully obvious to anyone holding an even modestly skeptical view on the Chinese centrally planned economy.

The glut of everything from steel and household appliances to cars and apartments is hampering China’s efforts to emerge from a sharp economic slowdown. It has also produced a series of price wars and has led manufacturers to redouble efforts to export what they cannot sell at home.

Just like in the US, and Europe, the Chinese government is, gasp, lying about everything:

The severity of China’s inventory overhang has been carefully masked by the blocking or adjusting of economic data by the Chinese government — all part of an effort to prop up confidence in the economy among business managers and investors.

Naturally the Politburo, which measures GDP once a product or service is created, is delighted to produce more, more, more of everything. The demand aspect of the core economy equation does not matter. The problem is that even the Chinese central planners have now run out of space under the rug.

But the main nongovernment survey of manufacturers in China showed on Thursday that inventories of finished goods rose much faster in August than in any month since the survey began in April 2004. The previous record for rising inventories, according to the HSBC/Markit survey, had been set in June. May and July also showed increases.

And now that China too has run out of collateral with which to fund endless supply, which in turn requires legitimate demand, it has big, big problems."

Read the whole article.