CHINA’S FLASH PMI SOFTENS MAY
The latest HSBC Flash PMI on China points to a still soft economy in China. The latest reading came in at 48.7, down from 49.3 in April. The Manufacturing Output Index came in at 50.5, up from 49.3. Here’s more via Markit:
“Commenting on the Flash China Manufacturing PMI survey, Hongbin Qu, Chief Economist, China & CoHead of Asian Economic Research at HSBC said:
“Manufacturing activities softened again in May, reflecting the deteriorating export situation. This calls for
more aggressive policy easing, as inflation continues to slow. Beijing policy makers have been and will step up
easing efforts to stabilize growth, as indicated by a slew of measures to boost liquidity, public housing and
infrastructure investment and consumption. As long as the easing measures filter through, China will secure a soft landing in the coming quarters.’”
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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HSBC: “China manufacturing still weak due to lower final demand overseas”.
China Government: “No worries we’ll offset it by building some more soccer stadiums, airports, apartments and other crap we don’t need, all the while talking about how we acknowledge the need to steer our economy away from investment”
U.S. Government: “We won’t offset lack of demand by building stuff that we do need — clean energy infrastructure, universal health care system, all around better infrastructure.”
It seems that China’s policy is working better than that of U.S…
Yeah DD I don’t disagree with the logic that USA could stimulate by doing VALUABLE projects. Its just a matter of China’s economy already being horribly imbalanced towards fixed asset investment – its 50% of their GDP, yet they keep doing worse than useless new projects! And its all funded by new debt. This economic growth model WILL blow up on them – there’s plenty of historical examples of investment fuelled “growth miracles” and they have all ended the same way – with the model passing its “best-before” date and subsequent growth rates plunging. Japan is perhaps the best known example…
As an Australian funds manager I’m watching China very closely (and am rather concerned). We’ve hitched our economy to theirs…
“as an Australian fund manager…” Hasn’t Australia also hitched itself to a housing bubble too? Huge mortgage debt and home building fueling the economy, with massive Gov stimulus aimed at the housing industry each time it looked like it was faultering. Your thoughts on that?