THE Chinese calendar is often described, incorrectly, as a lunar one. It is in fact a lunar-solar mix, with an extra lunar month added every so often to stay in line with a wholly solar calendar. This ancient system, some 2,500 years old, is not just an academic curiosity. It has a big impact on economic data. The Chinese New Year holiday, and with it a peak in consumption and prices, scuttles back and forth between January and February (in the Gregorian calendar), complicating the annual comparisons.
Every few years—2015 being one—the impact is bigger than most. Thanks to the insertion of a lunar leap month last year, the Chinese New Year holiday falls especially late this February (it begins on the 18th). That astronomical quirk should offer a modicum of comfort to those fretting about the latest Chinese economic data, which, at first glance, portend doom.
The numbers made it look as if China was on the brink of deflation. Consumer prices rose just 0.8% from a year earlier, a sharp decline from preceding months. Trade was also weak, with exports falling 3% and imports down 20% (see chart).
But the distortion of the...Continue reading
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