Hi Dnunez

Thanks for your questions. Firstly, as I said in the article, China's GDP number is problematic, but not so bad. The government has made progress in improving the statistics. Compared to most developing countries, China's statistics data is much better.

Secondly, corporate earnings is a very credible indicator in China. Surprising, right? If you look at the historical corporate revenue and profit data, it reflects China's industrial situation very well. For example, while China's GDP growth remained at around 7% in 2015, industrial revenue grew only 1% and profits declined. This is consistent with the fact that during this slowdown, the industrial sector was hurt more seriously. One possible reason is that the industrial data is reported directly to the NBS (National Bureau of Statistics) by the enterprises, meaning it is less affected by the government.

Thirdly, I agree that we will see more bankrupts in future. But unlike Enron, the bankrupt is not due to the fraud in accounting practices, but largely due to the pressure of declining profits and high debt, like Suntech in Wuxi. In China, the fraud accounting is more common in listed companies (especially the small companies), and it will not have significant impact on the whole economy as 1) there are less than 3,000 listed companies in China, a tiny share compared to a total of 5 million enterprises, and 2) China's stock market is a basically closed one and the overseas impact will be quite limited.

Hope this helps.

best,
Janet