China PMI Falls to a 9-Month Low

More bad news from China here as the Flash PMI falls to a 9 month low (via Markit):

Key points

  • Flash China Manufacturing PMI™ at 48.3 (49.2 in May). Nine-month low.
  • Flash China Manufacturing Output Index at 48.8(50.7 in May). Eight-month low.

The HSBC Flash China Manufacturing Purchasing Managers’ Index™ (PMI™) is published on a monthly basis approximately one week before final PMI data are released, making the HSBC PMI the earliest available
indicator of manufacturing sector operating conditions in China. The estimate is typically based on approximately 85%–90% of total PMI survey responses each month and is designed to provide an accurate indication of the final PMI data.

Well, the US economy now looks like the only moderately strong leg.  There’s certainly not a lot of help coming from Europe or China.  Here’s to hoping the isolated bit of strength can continue.  I am hopeful.  But increasingly less hopeful…



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Cullen Roche

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. He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance and Understanding the Modern Monetary System.

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  1. I wonder if you are familiar with The Sinocism China Newsletter?

    It is a good source for news and information about China, published out of Beijing by an American named Bill Bishop. He has bonafide credentials. Check it out – typically, I find that western reporting about affairs in China are poorly constructed and reasoned, and almost always jaded :)

  2. It is quite difficult not to be jaded when you have a GDP supposedly quadrupling but you have got nothing to show for it from your investment in the Shanghai Composite…
    I wish I could sometime be one of the princelings then I’d buy in “beautiful” China.

    Bill’s Bishop does ok work but from what he expertly curates the approachable articles, for non-mandarin speaking readers, come from Western news agencies and English CCP propaganda media. The juicy stuff is often in mandarin.

    In any case, I sense he has been around for too long…others are leaving :

  3. Can you really have a “moderately strong leg” in a world based upon open trade?

  4. Cullen,

    What may be the drivers/developments that would prevent US from going into recession, given these developments. Hope is good thing, but not good enough for investment decisions.
    China going into recession, coupled with their own liquidity crisis may have the same effect as Asian crisis in the nineties. Maybe, even worse…