Goldman’s O’Neill remains solidly bullish on China.  Watch the CNBC video (at around 4 mins) – click here.

From ChinaStakes.com – After Statistical Adjustment, China’s Growth “Appears” More “Sustainable”.

(ChinaStakes.com) … According to NBS data released on December 25, the adjustment of GDP in 2008 totaled 1.34 trillion, about 4.4%. Primary industry’s figures were down 29.8 billion yuan, from an 11.3% proportion of overall economy to 10.7%. Secondary industry increased by 282 billion yuan, its proportion down from 48.6% to 47.5%. Tertiary industry’s numbers were up a staggering 1.0853 trillion yuan, its proportion also up from 40.1% to 41.8%.

… The current consumption rate of around 35% may still be greatly underestimated.  Analysts say rates may be underestimated by at least 10 to 20 percentage points. The obvious errors in tertiary sector statistics, in particular, throw that question up into the air.

People tend to use “total retail sales of social consumer goods” to measure consumption, but in fact this data includes neither “service consumption” in education, health care, or even owner-occupied housing, nor area consumption below the county level.

A bullish piece on China by the New York Times (10 Dec, 2009) – “Recession elsewhere, but it’s booming in China”:

(NY Times) … The Chinese market is “on full tilt — booming is an understatement these days,” said John Bonnell, the director of Asia vehicle forecasting at JD Power & Associates.

… When car sales began surging early this year, many auto executives attributed the boom to government incentives. … But the boom has broadened to categories that barely qualify for incentives.  SUV sales rose 72 percent in October from a year earlier. At Nissan, sales of cars with larger engines that do not qualify for the sales tax reduction are growing even faster than sales of small-engine cars.

Not only cars, but also many product markets with interesting growth:

… Automakers are on track to sell 12.8 million cars and light trucks in China this year, virtually all of them made in China (although many are foreign brands), compared with 10.3 million in the United States. Appliance manufacturers expect to sell 185 million refrigerators, washing machines and other kitchen and laundry equipment in China this year, compared with 137 million in the American market.

In desktop computers, China moved solidly ahead of the United States in the third quarter, buying 7.2 million compared with 6.6 million in the United States.

… At the same time, Chinese banks are stepping up consumer lending. The proportion of car sales financed with loans has doubled this year, to nearly 25 percent… Credit card spending rose 40 percent in the first nine months of the year compared with the same period last year, yet China still has just one credit card for every eight people, compared to two credit cards for each American man, woman and child.

However, the same argument – China’s growth can’t lift the world:

… The size of China’s consumer market, notwithstanding its growth, will make it hard for China to rescue the world economy by itself. Total consumer spending in China is still less than a sixth of American consumer spending at current prices and exchange rates. …

… The average new car sells for $17,000 in China compared with almost $30,000 in the United States, according to JD Power. … While the Chinese market is one-quarter larger in the number of cars sold, the American market is still about two-thirds larger in dollar terms. Similarly, the U.S. market for household appliances is a third larger in dollars, even though the Chinese market is a third larger in the number of appliances…