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Who believes in China’s output gap?

Andrew Batson · 13 Aug 2025 · andrewbatson.com ↗

2 korrents from this piece

Andrew Batson did not write this page.

Every claim below was made in this piece, quoted word for word and numbered in the order the piece makes them, so you can read it there rather than take our word for it. The sentence above each quote is our reading of the claim, not their wording. Each quote was checked against a stored copy of the page at build time; where the two differ, the quote is the fact.

  1. Our reading

    China faces a genuine, sizable output gap right now, not just a lower structural growth ceiling.

    Their wordsI'm with the markets here: I believe in the output gap. The structural slowdown of the Chinese economy is an incredibly consensus view, and I believe in it too.

  2. Our reading

    When assessing an economy's trajectory, current performance signals are more useful than forecasts of potential GDP growth.

    Their wordsBut for a variety of reasons I think it makes more sense to stay agnostic about forecasts of potential GDP growth, and focus more on the signals the current performance of the economy is sending.