Marginal Revolution alerts us to the fact that China’s generated 4% less electrical power in October then they did a year before. If this statistic is accurate, China is in a devastating free fall.

One should note that many of the comments on this post are garbage. For example, the idea that this change can be accounted for by the Olympics does not pass the smell test. In the first place, this was a year over year comparison. In other words it was comparing October of this year with October of last year. A lot of people talking about the effects of the Olympics are talking as if it is a drop off from the previous month. Furthermore, the idea that the Olympics can dramatically effect the energy consumption of a billion+ people is absurd. If anything, the Olympics should have cause a rebound in October as many the restrictions put into place for the Olympics were lifted.

The efficiency arguments are also a stretch. If China can grow GDP and shrink electrical usage at the same time it would be one for the history books. I don’t doubt that China is becoming more energy efficient. But historically speaking, efficiency gains only mean that that GDP growth results in a smaller increase in electrical generation. If anyone knows of a case where a developing country cut electrical usage and raised GDP at the same time they should let me know.

The real question centers around reliability of this statistic. All statistics taken by government agencies need to be taken with a grain of salt. And in China that goes double. Plus, I would have liked to know how noisy China’s electrical statistics normally are. Maybe it is common for them to bounce around a lot.

Having said that, there is lots of other anecdotal evidence to the effect that China took it hard in October.

For example, The US Censuses Bureau reports….

The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for October, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $363.7 billion, a decrease of 2.8 percent (±0.5%) from the previous month and 4.1 percent (±0.7%) below October 2007. Total sales for the August through October 2008 period were down 1.3 percent (±0.5%) from the same period a year ago. The August to September 2008 percent change was revised from –1.2 percent (±0.5%) to –1.3 percent (±0.3%).

Kind of funny how the US sales drop of 4% from last October matches the drop in China’s electrical consumption huh?