THE GOOD: A 7.9-per-cent growth rate is the envy of the West; stockpiling and infrastructure have driven the global rebound in commodity prices
THE BAD: Who's buying? Empty wallets in the U.S. and Europe and thrifty Chinese consumers threaten to choke off the comeback
THE UGLY: When will Beijing stop boosting inefficient state enterprises and open the credit taps to millions of aspiring entrepreneurs?
Investment banker Ken Courtis has his own personal gauge for determining the health of the Chinese economy, and it has nothing to do with often-questionable government statistics, an overheated stock market or soaring purchases of commodities.
If traffic is light enough that he can make it to five or more meetings a day in the usually choked streets of Beijing or Shanghai, and if people can actually fit him into their schedules, he knows business is bad. Conversely, if he can be squeezed into only two meetings a day, it means business is booming.
And these days? "At the moment, you can do three," says Mr. Courtis, a former vice-chairman of Goldman Sachs Asia. It's as good a signal as any that China's economy is on the rebound.
Reading the Chinese tea leaves has become a prerequisite for global business. Every reported statistic is carefully scrutinized, and every blip - whether up, down or sideways - has the ability to move equity, bond and commodity markets around the world. Quite simply, the planet is pinning its hopes of a recovery from the depths of the worst recession since the Dirty Thirties on China being able to sustain its surprisingly boisterous growth of recent months.
Yet no one, least of all the experts, is sure about the true state of the Chinese economy, or whether it has the ability to carry the rest of the world on its coattails.
On paper, China's economy is blowing the doors off the West. Despite sharply falling exports, it grew at an impressive 7.9-per-cent annual clip in the second quarter from a year earlier, according to government data, and a stunning 15 per cent from the first quarter of 2009. There are predictions China will overtake Japan to become the world's second-largest economy by 2010. Five years ago, that didn't seem likely until 2020 at the earliest.
But China's all-star performance comes with a major-league-sized caveat: Official data are notoriously unreliable. Even the most bullish analysts concede the GDP numbers are flawed. That's because the Chinese rely on lower levels of government to collect the data.
Local officials win promotions based on the figures they produce, so they have a strong incentive to exaggerate. Each level is eager to juice the numbers to please those above.
China's National Statistics Bureau recognizes this and typically cuts the tallied figures, which helps explain why, even in the official statistics yearbooks, the provincial and national figures rarely add up.
The official stats also fail to account for the enormous impact of China's burgeoning underground economy, which includes such services as restaurants and an army of small, illegal mining operations.
Such under-the-radar activity accounts for about 20 per cent of China's economy, says Scotia Capital China analyst Na Liu. But it never shows up in the figures of economic output. "It's like a major city in China never goes shopping, according to the GDP," Mr. Liu says.
To get a better read on the country's economic health, China watchers are increasingly turning to alternative indicators to supplement the government stats. They're tracking everything from electricity consumption to satellite images from Google Earth to make their calls on the economy.
What they're finding are reasons for equal measures of optimism and concern.
A massive four trillion yuan ($586-billion U.S.) stimulus package has spurred a deluge of domestic infrastructure projects. Looser credit conditions have spawned a record 7.4 trillion yuan in new loans in the first six months of the year - that's nearly a quarter of China's gross domestic product, and well in excess of the government's own target of five trillion yuan in new loans for the entire year.