Chinese manufacturing recovery in full swing

ERJ staff report (PR)

Hong Kong - Total orders in the Chinese manufacturing sector have, this month, increased at their fastest rate for 18 months, while manufacturing output there reached a 16-month high, HSBC has reported.

The assessment appears in the bank’s ‘flash China manufacturing purchasing managers’ index (PMI)’ - a monthly update published ahead of final PMI data. This is said to provide an accurate, early indicator of the state of the China’s manufacturing sector.

HSBC's China manufacturing PMI rose to 52.0 in July, from 50.7 in June, and the output index reached 52.8 compared to 51.8 the previous month. The data, which is based on a survey of 420 purchasing executives, was taken 11-22 July.

Both new orders and new export orders expanded at a faster rate than in June, according to Hongbin Qu, chief economist, China & co-head of Asian economic research at HSBC.

“The employment and prices sub-indices also improved. Meanwhile, stocks of finished goods contracted at a slower pace,” he said.

"Economic activity continues to improve in July, suggesting that the cumulative impact of mini-stimulus measures introduced earlier is filtering through,” the economist added. “We expect policy makers to maintain their accommodative stance over the next few months to consolidate the recovery.”