Xinhua recently reported that HSBC released its January PMI final number for the Chinese manufacturing sector. The number 49.7 represents the second month in a row that the figure remained below 50. The sub-indicator of employment is 49.5. Many experts suggested that the government may have to adjust its policies, which means possible interest rate cuts in the first quarter or some other similar policies. Some read the new PMI number as a sign of an “unexpected low level of economic activities.” According to Qu Hongbin, HSBC Chief Economist of the Grand China Region, both new domestic orders and export orders are declining. The unemployment number reached a 15 month low. The manufacturing sector is still suffering from a low level of demand. Qu suggested that the government should relax both its currency and its financial policies. PMI is an indicator of financial activity reflecting purchasing managers’ acquisition of goods and services. A PMI number below 50 typically reflects a decline.
Source: Xinhua, February 2, 2015