Billionaire investor Kerr Neilson thinks China is growing at just 4%

China’s official GDP figures for Q2 recently showed growth hit the official target of 7% perfectly. That’s a remarkable performance in light of the various partial indicators and many unofficial statistical releases for the economy.

So the data was widely questioned.

Some reckon there’s dead giveaway that China’s GDP numbers are fake while others highlight the role that finance, and the stock market rally, played in driving growth in the quarter.

But Kerr Neilson, Australian billionaire investor and founder of Platinum Asset Management, has taken skepticism of the Chinese growth rate to a whole new level.

Neilson told ABC Radio’s World Today program yesterday that Chinese growth is much slower than most people think. In answer to the question “Do you believe the economy is growing at 7 per cent per year or do you think that it’s growing at a slower rate?” Neilson said:

All the indicators we look at, and I’m not talking about electricity or those old fashion measures, but the other measures suggest that it’s growing more like 4 or so. The reason the Government is sticking to a high growth figure is a sort of confidence boosting measure as far as we can see and to some extent face saving.

On the topic of the Chinese stock market Neilson said he’s not overly worried, and that the volatility might have played itself out “largely, because the amount of outstanding margin credit has halved and so you’ve had many positions cleared, not all, but you’ve had a fair clearing of the market.”

So, some bad news for the Australian economy but maybe some good news for global investors spooked by recent Chinese stock market gyrations.

You can read the full transcript of the interview here.

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