Electricity production – supposedly a rare “honest” gauge of Chinese industrial activity and economic growth – may be misleading investors on the true state of the nation, analysts warn.

A recent surge in power generation may have more to do with the demise of a commodity arbitrage play than a revival of activity in China’s “workshop of the world” factory heartlands. It could also mean that the world’s third biggest economy may not find a base for broad recovery next year.

One strong note of caution on electricity consumption, issued this week by the chief China economist at Royal Bank of Scotland, said that changes in aluminium production – a notoriously power-hungry industry – were distorting the numbers and may be significantly exaggerating the true level of industrial improvement.

The warning comes amid mounting concern that official readings of the Chinese economy are being manipulated more than usual in Beijing’s haste to declare the country the first leading economy to emerge from the global crisis.

The monthly output of Beijing’s National Bureau of Statistics (NBS) has long been treated gingerly by foreign China-watchers, and in some cases with outright scepticism. GDP figures tend to be “smoothed” at the turning-points, said one senior economist.