The Keqiang index, an unofficial growth indicator named after Chinese Premier Li Keqiang, has been pushed to a four-year high thanks to the steady hum of construction machinery.  

The index, coined by British news magazine The Economist, is heavily depended on infrastructure, as it is made up of power consumption, loans and railway cargo. It rose 12 percent year-on-year in the latest reading.

As local governments announced a total of 50 trillion yuan (7.23 trillion US dollars) worth of fixed asset investment plans, excavator machine sales in China jumped almost 300 percent in February, the highest on record.

“Infrastructure investment is undoubtedly a strong boost to the economy. But it needs to be of high quality. For example in China’s northeast, there are no shortages of roads and bridges. But finding growth momentum for the region still needs better strategic planning,” said Zhang Yue, managing director of Boston Consulting Group Global. 

Before 2013, the index had been closely correlated with GDP growth. But a new trend has been evident since last year. The gap between the index and GDP has grown substantially and has become more and more obvious.

According to Chen Bo, professor at Huazhong University of Science & Technology, the index is an early indicator for the economy in the short run. 

Zhang Yue pointed out a more structural reason.

“The new economy, for example healthcare equipment and information technology, is becoming more important. The old economy is estimated to make up only four percent of the GDP. The rest is made up of these components, which are not reflected in the Keqiang index,” she stated.

Experts say it could be evidence that China’s long-time pursuit of structural reforms is having some effect.