By nearly any measure, China’s financial system is slowing. Customers are cautious. Residences are sitting unsold. Industrial income are falling, too.
However China’s state media needs folks to take a look at one other indicator: males’s underwear.
Gross sales of boxers and briefs are surging in Liaoning Province, in response to The World Instances, a fervently nationalist tabloid managed by the Communist Social gathering, bringing a bit of excellent information to a down-and-out a part of China’s rust belt that epitomizes most of the nation’s financial issues. Cheered by the prospect of a brighter future, the article argued, Liaoning males are upgrading part of their wardrobe that almost all of their family and friends won’t ever see.
In highlighting such an unorthodox financial indicator, The World Instances is reminiscent of a protracted custom of eclectic financial indicators, one which most people and even some economists like to show to when the same old yardsticks of the dismal science simply gained’t do.
However within the case of the Liaoning Underwear Index, economists are — to place it flippantly — skeptical.
“The one related context right here,” mentioned Arthur Kroeber, managing director of Gavekal Dragonomics, a analysis agency, “is that China’s financial system is slowing markedly and official media have been ordered to smear the pig with lipstick.”
The drive to discover a measure that exhibits prosperity in a single nook of China is probably comprehensible. Chinese language leaders are contending with a gradual move of disappointing financial information that has affected confidence among consumers and traders; the nation’s inventory market has misplaced 1 / 4 of its worth this yr. All of the whereas, Xi Jinping, China’s high chief, is navigating a protracted commerce conflict with the USA that, if it intensifies, may make the issue even worse.
Chinese language officers have taken steps to insulate the general public from the unhealthy information, together with censoring local media, whereas pledging to cut taxes and make different strikes to cheer up companies.
The World Instances didn’t invent the Underwear Index. As soon as championed by Alan Greenspan, the previous chairman of the USA Federal Reserve, the Underwear Index was utilized by American media in the course of the depths of the worldwide monetary disaster as a shorthand for a recovering economy. (The Underwear Index missed the restoration by a couple of yr.)
Different uncommon indexes have loved various levels of success. For understanding trade charges, there’s The Economist’s Big Mac Index. The Lipstick Index is taken into account an inverse indicator — when instances are unhealthy, goes the pondering, girls spend cash on lipstick somewhat than costlier purchases like clothes or sneakers. Equally, the Excessive Heels Index is meant to foretell downturns. (Girls flip to heels as a way of escape when issues are unhealthy, or so the idea goes.)
In China, casual indicators have had a fair larger attraction due to a general mistrust of official statistics. There’s the Pickle Index, which is used to measure the speed of China’s urbanization. (Migrant laborers like consuming pickles, the pondering goes, so when gross sales are up in a metropolis or area it suggests extra laborers have arrived.) Some additionally observe gross sales of on the spot noodles, a cheap meal when takeout is just too expensive.
Liaoning itself supplies a helpful instance. Only one yr in the past, Chinese language officers mentioned Liaoning had padded its development statistics between 2011 and 2014. Even earlier than that, it gave delivery to one among China’s most intently watched unofficial financial gauges: the Li Keqiang Index.
Named after China’s present premier, the Li Keqiang Index received its begin when Mr. Li was the highest Communist Social gathering official within the province. In 2007, when Mr. Li was celebration secretary of Liaoning, he told the United States ambassador to China that official figures have been “man-made” and that he most well-liked to trace the province’s financial tendencies by means of the province’s railway freight quantity, electrical energy consumption and financial institution loans.
Whereas the Li Keqiang Index has some grounding in financial nuts and bolts, the Liaoning Underwear Index was greeted by economists with a hearty dose of warning.
The World Instances cited information from the analysis arm of the web retailer JD.com, saying that males’s underwear gross sales had jumped 42 % in 2017 and 32 % thus far this yr. The speed of enhance in underwear gross sales in Liaoning is larger than in every other province, The World Instances wrote. However when requested whether or not JD.com had comparable figures for different provinces, Ling Cao, a spokeswoman for the corporate, mentioned, “We don’t have figures from different provinces.”
The JD.com figures are additionally on-line solely, which means they don’t embrace underwear gross sales in brick-and-mortar shops.
World Instances employees members didn’t reply to calls and an e mail for remark.
Right here’s the factor: Even when its methodology is unsure, the Liaoning Underwear Index could also be coincidentally proper.
The province’s figures for industrial income, manufacturing and consumption have been on the rise, consultants say. A lot of that development could come from Chinese language efforts to rekindle the financial system, because it turns away from efforts to chop debt and begins approving the type of big-cement, big-iron constructing and infrastructure applications that fueled a lot of its development after the worldwide monetary disaster of 2008.
“On the face of it, the Liaoning department of the Nationwide Bureau of Statistics has reported some first rate financial numbers for the previous few months,” mentioned Victor Shih, an affiliate professor on the College of California, San Diego.
Nonetheless, that enchancment is coming from a low base. Most just lately, the province posted some of the worst economic numbers within the nation.
“Having mentioned that,” Mr. Shih added, “that is occurring after a few years of dismal financial efficiency.”
There’s one other chance, he mentioned. Underwear, being tender and eminently foldable, will be simply shipped from one nook of China to the following. So it is going to go the place there are clients.
Maybe, goes this pondering, Liaoning males are returning house as a result of they will’t discover work in every other province. And so they need to put on one thing.