From the AP….

The difference lies in the way growth is measured. Beijing uses a method that compares growth in one quarter with a full year earlier and says its economy expanded by a healthy 6.8 percent in the final quarter of 2008.

But experts say that compared to the previous three months — the system used by most other major countries — China’s growth fell to as low as 1 percent or possibly zero.

“The recent weakness is much worse than the long-term trend,” said JP Morgan economist Frank F.X. Gong. Merrill Lynch economist Ting Lu said fourth-quarter growth from the previous three months was “close to zero.”

The lower quarter-on-quarter growth figure would be in line with other indicators that show exports and manufacturing falling and weakness in investment and consumer spending.

Basically, they are saying the only reason that China is showing economic growth is because there was growth earlier in 2007.

Edit: It should be noted that the US is not a lot better when it comes to statistics. This from Dean Baker….

That may be hard to believe, but the economy almost certainly lost more jobs in January than the 597,000 job loss reported by the Bureau of Labor Statistics (BLS). The reason is that BLS imputes jobs for new firms that are not included in its sample.

The formula used for calculating this imputation is backward looking, meaning that it depends on growth in prior quarters. When the economy takes a sharp turn in either direction, as it did last fall, the imputation is likely to be too high or too low, depending on the direction of change.

From Rod Dreher…..

In the 1930s, he said, the US banking system was about half the GDP. Today, it’s 150 percent of GDP. In Britain, it’s 400 percent of GDP.

What’s more, in the 1930s America was nation that loaned money to the rest of the world. Now it is a nation that borrows from the rest of the world. This is one of many reasons why it is wrong to look to the 1930s for lessons on what to do today even if you buy Keynesian economics.

From Macro Man….

At the same time, US sovereign 5 year CDS surged 15 bps yesterday to 86 bps. To put that in perspective…..it’s where Citigroup CDS was trading exactly one year ago. Remarkably, Macro Man could only find two other countries with double-digit CDS ratings: Japan (58), Germany (59), and France (69). Was it really only a decade or so ago that Japan’s loss of a AAA rating amidst massive borrowing made waves? Now markets are essentially saying that the Japanese government (facing a massive demographic challenge) is the best creditor in the world.

CDS = Credit Default Protection.

To be honest, I don’t really understand this. As I understand it, the CDS contracts don’t cover inflation. Do people really believe that the US will default rather then inflate? I suppose it could happen.

From Bloomberg…..

The steepest decline in Mexico’s peso in 13 years blindsided everyone from UBS AG economists to Gustavo Huitron, the local marketing manager for Mercedes-Benz.

After weakening 20 percent last year, the currency fell to a record low of 14.4484 per dollar today. RBS Greenwich Capital Markets in Greenwich, Connecticut, now predicts another 3.8 percent drop by June 30. The peso’s worst performance since 1995’s so-called Tequila Crisis is being driven by the U.S. recession and falling oil prices, which are cutting Mexican exports and government revenue.

And from pakwatan.com….

Pakistan Electric Power Company (Pepco) is under enormous miseries, facing a shortage of 10,000 tones a day supply of fuel oil to its power producing units as the consignments of Pakistan State Oil (PSO) remained stuck up at the port.

The situation is accordingly resulting into a power shortage of about 600 MW in the system and no turn around in the situation is possible before Monday, February 2, 2009 when the PSO would get its consignments cleared at the port in Karachi.

From the Times….

The depth of the downturn in Japan, the world’s second-largest economy, emerged yesterday with industrial production showing a record 9.6 per cent decline last month and unemployment up by 0.5 per cent to a three-year high of 4.4 per cent.

Output fell at its fastest pace since records began in 1953 and it was considerably worse than the 9 per cent consensus forecasts expected by the market and up from a previous record of 8.5 per cent a month earlier. It is particularly worrying for a country that relies heavily on global exports of cars, electronics and machinery.

Needless to say, this is a lot worse then what America is experiencing even if you account for the build up in inventories. An almost 10% drop in one quarter is a 40% annualized drop. I don’t really think it will keep dropping at the current rate, but even if all it did was level out that would still be a heck of drop.