Most countries around the world faced headwinds in 2022 that slowed their respective economies. Whether inflation, problems from COVID-19 or supply chain problems caused by the Russia-Ukraine war, it has been a difficult year economically.

Well, apparently for everyone except China.

What happened: Bloomberg reported that in a program on state television, the Chinese President Xi Jinping said China’s GDP will surpass US$17.4 trillion in 2022, a growth rate of more than 4.4%.

For comparison, estimates are that US GDP growth will be below 2% in 2022.

China Bear: Muddy Waters, a renowned short selling research firm, tweeted that reading Bloomberg’s report was “like reading an onion.” It’s safe to assume that Muddy Waters didn’t believe in China’s supposed growth rate.

Muddy Waters had long criticized the figures from China. In 2011, the company uncovered accounting issues sino forest, a company that claimed to be the leader in afforestation in China. Muddy Waters released his report on Sino-Forest and the stock plummeted 82% and the company eventually filed for bankruptcy.

A few years later, Muddy Waters uncovered similar problems LinkMotion Inc (NQ Mobile), another Chinese company. Muddy Waters said Link Motion invents customers. Eventually, Link Motion’s stock fell more than 80% and the CEO resigned.

China, which recently lifted some of its “zero-COVID” policies, has seen a spike in COVID-19 cases of late, adding to its economic uncertainty. But Chinese stocks have been strong for the past month or so after the country eased its COVID-19 restrictions.

Can’t argue with returns: Alibaba Group Holding Ltd – ADR BABA up nearly 65% ​​from its October lows. That Invesco China Technology ETF CQQQ is up about 15% in the last month.

Photo: Tung Cheung via Shutterstock