China PMI Expands at Fastest Pace in 19 Months

More signs of stabilization in one of the world’s largest economies.   Today’s Chinese PMI rose to a 19 month high and solidly in expansionary territory (via Markit):

After adjusting for seasonal factors, the HSBC Purchasing Managers’ Index™ (PMI™) – a composite indicator designed to give a single-figure snapshot of operating conditions in the manufacturing economy – posted 51.5 in December, up from 50.5 in November, signalling a modest improvement of
operating conditions in the Chinese manufacturing sector. Moreover, it was the highest index reading since May 2011.

Commenting on the China Manufacturing PMI™ survey, Hongbin Qu, Chief Economist, China & Co-Head of Asian Economic Research at HSBC said:

“December’s final manufacturing PMI picked up for the fourth consecutive month to a 19-month high, thanks to the faster new business flows and the end of destocking. Such a momentum is likely to be sustained in the coming months when infrastructure construction runs into full speed and property market conditions stabilise. This, plus Beijing’s reiteration of keeping pro-growth policy in place into the coming year, should support a modest growth recovery of around 8.6% y-o-y in 2013, despite the ongoing external headwinds.”


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Cullen Roche

Mr. Roche is the Founder of Orcam Financial Group, LLC. Orcam is a financial services firm offering research, private advisory, institutional consulting and educational services.

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  • Alberto

    Still debating about statistics carefullt planned by the chinese authorities ? Funny. if they have a meaning this is it: no more fiscal or monetary stimulus in China in 2013. This is the message from Beijing.

  • Hans

    Interest thoughts, Alberto…Why is it never mentioned that their economy needs stimulation in order to advance?

    Remember their first capitalistic stimulation program, which reach 20% of GNP…

  • pezhead9000

    All cheer the triumphant of central planning…
    “It is, to me, astonishing that China in just five years is “replicating the entire US commercial banking sector”, and yet so many analysts are expressing delight with China’s return to growth. Of course you can generate growth if you force such a tremendous expansion in credit, but this is simply unsustainable.”

  • Johnny Evers

    NPR did a piece the other day about Chinese novelist writing about the nature of the country’s bureaucracy.
    The key point:
    “Telling lies, fakery and falsification of official statistics has become a national disaster. If it’s not stopped, it could bring about a national catastrophe,” Wang Xiaofang warns.

  • pezhead9000

    Hahaha – everything is an illusion.

    Become a Buddhist and you’ll be enlightened as nothing has meaning…nothingness is enlightenment.