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Caixin: Chinese July PMI Saw Unexpected Recovery with Sustainability Concerns

Well-known Chinese financial site Caixin recently released its official Chinese Manufacturing PMI index number for July, which was 50.6. Caixin PMI was formerly known as HSBC PMI, which was a well-respected economic indicator monitored globally by financial institutions. The July PMI number showed the first strengthening in the health of the manufacturing sector since February 2015. Also unexpectedly, the official July manufacturing PMI number released by China’s National Bureau of Statistics was 49.9, which indicated a continued decline in the sector. The two popular PMI indexes pointed in completely opposite directions. Caixin’s report indicated that it was a renewed rise in total new business that drove the headline index higher in July. Companies surveyed suggested that new products and improved marketing strategies had boosted new business. In July, however, despite the upturn in new orders, goods producers continued to lower their staffing levels. The improvements seen in the sector remain marginal and some analysts doubted the sustainability of such a minor rebound. PMI (Purchasing Managers Index) is an indicator of financial activity reflecting purchasing managers’ acquisition of goods and services. A PMI number below 50 typically reflects a decline.
Source: Caixin, August 1, 2016