CHART OF THE DAY: The Chinese Premier's 2 Favorite Economic Indicators Look Super Depressing

Earlier this week, we learned that China's economy decelerated to 7.5% growth in Q2, which is right in line with the Chinese government's target.

However, some economists and skeptics have long argued that the economic data produced by the Chinese government is unreliable, especially since it seems to suit the needs of policymakers.

As such, savvy economists often point to other indicators that act as proxies to Chinese economic activity. These stats include purchasing managers' indices, gasoline usage, and the export data of China's trading partners.

China's Premier even offered his own proxy economic indicators. Unfortunately, they don't look too hot.

From Standard Chartered's Stephen Green:

...Such proxies are, no doubt, useful pointers. But one has to be careful. Figure 11 shows two popular proxies – growth of rail freight movement and electricity production. The two (in addition to bank credit) were reported to have been favourites of Li Keqiang when he was running Liaoning province. We show what has been happening. Pretty depressing: the chart suggests that the economy has entered a recession.

"However, choose different proxies and the story changes," added Green.