By almost any measure, China’s economy is slowing. Consumers are cautious. Apartments are sitting unsold. Industrial profits are falling, too.
But China’s state media wants people to look at another indicator: Men’s underwear.
Sales of boxers and briefs are surging in Liaoning Province, according to The Global Times, a fervently nationalist tabloid controlled by the Communist Party, bringing a bit of good news to a down-and-out part of China’s rust belt that epitomizes many of the country’s economic problems. Cheered by the prospect of a brighter future, the article argued, Liaoning men are upgrading a part of their wardrobe that most of their friends and family will never see.
In highlighting such an unorthodox economic indicator, The Global Times is harkening to a long tradition of eclectic economic indicators, one that the general public and even some economists like to turn to when the usual yardsticks of the dismal science just won’t do.
But in the case of the Liaoning Underwear Index, economists are — to put it lightly — skeptical.
“The only relevant context here,” said Arthur Kroeber, managing director of Gavekal Dragonomics, a research firm, “is that China’s economy is slowing markedly and official media have been ordered to smear the pig with lipstick.”
The drive to find a measure that shows prosperity in one corner of China is perhaps understandable. Chinese leaders are contending with a steady flow of disappointing economic data that has affected confidence among consumers and investors; the country’s stock market has lost a quarter of its value this year. All the while, Xi Jinping, China’s top leader, is navigating a protracted trade war with the United States that, if it intensifies, could make the problem even worse.
The Global Times didn’t invent the Underwear Index. Once championed by Alan Greenspan, the former chairman of the United States Federal Reserve, the Underwear Index was used by American media during the depths of the global financial crisis as a shorthand for a recovering economy. (The Underwear Index missed the recovery by about a year.)
Other unusual indexes have enjoyed varying degrees of success. For understanding exchange rates, there’s the Economist’s Big Mac Index. The Lipstick Index is considered an inverse indicator — when times are bad, goes the thinking, women spend money on lipstick rather than more expensive purchases like clothing or shoes. Similarly, the High Heels Index is supposed to predict downturns. (Women turn to heels as a means of escape when things are bad, or so the idea goes.)
In China, informal indicators have had an even greater appeal because of a general mistrust of official statistics. There’s the Pickle Index, which is used to measure the rate of China’s urbanization. (Migrant laborers like eating pickles, the thinking goes, so when sales are up in a city or region it suggests more laborers have arrived.) Some also track sales of instant noodles, a cheap meal when takeout is too costly.
Liaoning itself provides a handy example. Just one year ago, Chinese officials said Liaoning had padded its growth statistics between 2011 and 2014. Even before that, it gave birth to one of China’s most closely watched unofficial economic gauges: the Li Keqiang Index.
Named after China’s current premier, the Li Keqiang Index got its start when Mr. Li was the top Communist Party official in the province. In 2007, when Mr. Li was party secretary of Liaoning, he told the United States ambassador to China that official figures were “man-made” and that he preferred to track the province’s economic trends through the province’s railway freight volume, electricity consumption and bank loans.
While the Li Keqiang Index has some grounding in economic nuts and bolts, the Liaoning Underwear Index was greeted by economists with a hefty dose of caution.
The Global Times cited data from the research arm of the online retailer JD.com, saying that men’s underwear sales had jumped 42 percent in 2017 and 32 percent so far this year. The rate of increase in underwear sales in Liaoning is greater than any other province, The Global Times wrote. But when asked whether JD.com had comparable figures for other provinces, Ling Cao, a spokeswoman for the company, said, “We don’t have figures from other provinces.”
The JD.com figures are also online only, meaning they don’t include underwear sales in brick-and-mortar stores.
Global Times staffers didn’t respond to calls and an email for comment.
Here’s the thing: Even if its methodology is uncertain, the Liaoning Underwear Index may be coincidentally right.
The province’s figures for industrial profits, production and consumption have been on the rise, say experts. Much of that growth may come from Chinese efforts to rekindle the economy, as it turns away from efforts to cut debt and begins approving the sort of big-cement, big-iron building and infrastructure programs that fueled so much of its growth following the global financial crisis of 2008.
“On the face of it, the Liaoning branch of the National Bureau of Statistics has reported some decent economic numbers for the past few months,” said Victor Shih, an associate professor at the University of California, San Diego.
However, that improvement is coming from a low base. Most recently, the province posted some of the worst economic numbers in the country.
“Having said that,” Mr. Shih added, “this is happening after a couple of years of dismal economic performance.”
There’s another possibility, said Mr. Shih. Underwear, being soft and eminently foldable, can be easily shipped from one corner of China to the next. So it will go where there are customers.
Perhaps, goes this thinking, Liaoning men are returning home because they can’t find work in any other province. And they have to wear something.