23 December 2013

China SignPost™ “Greatest Hits” #4: Macro and Strategic Assessments

Andrew S. Erickson and Gabriel B. Collins, “China SignPost™ ‘Greatest Hits’ #4: Macro and Strategic Assessments,” China SignPost™ (洞察中国) 76 (23 December 2013).

China SignPost™ 洞察中国–“Clear, high-impact China analysis.”©

China SignPost anchors its China macroeconomic research with a tight focus on the sustainability of Chinese economic growth. The country’s comprehensive national power is ultimately predicated on having an economy robust enough to support spending priorities necessary for overall development. Unfortunately for Beijing, China is already experiencing an “S-curved” growth slowdown, both economically and more broadly. A growing array of structural factors such as pollution and chronic disease (e.g., diabetes) are beginning to pull China onto a slower growth curve, a concept introduced in an innovative and novel way by China SignPost. Our readers enjoyed our groundbreaking research on China’s movement into an “S-Curved” path of slower economic growth more than 12 months before our competition began publishing on the subject.

These reports offer a powerful but nuanced argument: China isn’t about to collapse by any means, but its growth rate is already slowing down—with major consequences. Three days after the release of China SignPost’s S-Curve report, Jennifer Richmond, STRATFOR’s Vice President of International Projects reportedly forwarded it to analysts at STRATFOR.

The analysis was widely praised by other experts, including by Thomas P.M. Barnett: “it is worth revisiting an excellent blog post from August by China Signpost’s Gabe Collins and Andrew Erickson entitled, ‘China’s S-Curve Trajectory,’ which argues that structural factors are likely to slow the growth of China’s economy and its ‘comprehensive national power.’” The Council on Foreign Relations deemed a September 2011 summary of our findings a “Must Read,” as one “of the best online analyses and inquiries on foreign policy.” China SignPost’s S-Curve concept has since received attention from U.S. government analysts and been employed widely in the investment research community. It has now achieved the status of conventional wisdom.

In building a larger analytical portfolio, China SignPost strives to tie our broad macro research to specific areas of impact, in order to help integrate our products with one another and better deliver concise and value-added insights to busy readers. For instance, we followed our S-Curve research with a detailed examination of how China’s evolving economic situation may affect the country’s military spending—a core driver of comprehensive national power and international influence.

Finally, China SignPost economic research also strives to develop interesting and effective benchmarks to measure specific sets of economic activity that are barometers for national and local-level economic health. In January 2012, China SignPost gained a jump on its competitors by using earthmover sales to gauge economic growth in a way less subject to official massaging of statistical data. Within 10 days, the Financial Times picked up the indicator and featured it in a “beyondbrics” blog entry.

To keep the scale of Chinese growth in perspective, China SignPost has also offered handy comparisons of how the economic statistics of Chinese municipalities, provinces, and other regions compare with their American and international counterparts.

As we follow China and its many associated metrics into 2014, we’ll continue to combine a broad macro outlook with tight linkages to the specific areas that matter most. We believe strongly that this combination of breadth and depth offers unique value, particularly in this period of growing uncertainty for the most dynamic power in the international system today.

About Us

China Signpost™ 洞察中国–“Clear, high-impact China analysis.”©

China SignPost™ aims to provide high-quality China analysis and policy recommendations in a concise, accessible form for people whose lives are being affected profoundly by China’s political, economic, and security development. We believe that by presenting practical, apolitical China insights we can help citizens around the world form holistic views that are based on facts, rather than political rhetoric driven by vested interests. We aim to foster better understanding of key Chinese developments, with particular focus on natural resource, technology, industry, and trade issues.

China SignPost™ 洞察中国 founders Dr. Andrew Erickson and Mr. Gabe Collins have more than a decade of combined government, academic, and private sector experience in Mandarin Chinese language-based research and analysis of China. Dr. Erickson is an Associate Professor at the U.S. Naval War College’s China Maritime Studies Institute (CMSI) and an Associate in Research at Harvard’s John King Fairbank Center for Chinese Studies. Mr. Collins is a J.D. candidate at the University of Michigan Law School. His research focuses on commodity, security, and rule of law issues in China, Russia, and Latin America.

The positions expressed here are the authors’ personal views. They do not represent the policies or estimates of the U.S. Navy, the U.S. Government, or any other organization. The authors have published widely on maritime, energy, and security issues relevant to China. An archive of their work is available at www.chinasignpost.com