We have long used changes in electricity consumption in China as a proxy for economic growth in the country. Like all such irregular economic indicators we know that it is a rough and ready approximation, but serviceable as a directional guide. So we should note that as China’s economy becomes more dependent on service industries, it may be becoming less serviceable in that regard. The case is newly laid out by Bloomberg News:
The country divides its economic data into three segments: primary industries, which include agriculture and livestock; secondary, comprised of manufacturing and construction; and tertiary, which includes services and logistics. Electricity consumption in secondary industries grew less than 5 percent in each of the four months through June compared with 10 percent to 14 percent during the same period in 2011, government data show. The primary group’s consumption fell from a year earlier in March, April and May. The tertiary group’s power consumption, by comparison, grew more than 10 percent from a year earlier for most of the first half.
A stagnation in electricity output that fanned speculation China’s slowdown is intensifying may instead be evidence of an accelerated transition to a more services-based economy.