PMI rally unutterable economy out of slowing shadows

Yesterday, HSBC released its August China manufacturing Purchasing Managers Index (PMI), which recorded a three-month high of 51.9 per cent, showing signs of a moderate upturn in the country's manufacturing sector in August following a slight weakness last month, as the overall rise in the new business boosted output recovery. The official China Manufacturing Purchasing Managers Index (PMI), released earlier by the China Logistics and Procurement Federation (CFLP), was 51.7, also up 0.5% from July.　　And a steady slightly rising basic situation, but the index has been 18 consecutive months at 50 critical level above. Lu, China economist at BofA Merrill Lynch, says the slowdown in the US and Japan has led to a weakening of the economy from the international perspective. Domestically, China's economy is slowing down because of continued property-control policies. But China's domestic demand may rebound from the government's push to build low-rent housing.　　Li Miao, an international analyst at the Bank, expects PMI to remain above the 50 line in the second half.　　Another expert believes that the index rebound does not mean that China's economy out of the slowdown zone. The growth momentum is not a big drop. China's manufacturing index reflects the real-time state of manufacturing in China, which is above 50 per cent showing that manufacturing is expanding and below 50 contracting.　　HSBC's China manufacturing purchasing managers ' index usually reflects the situation of small and medium-sized enterprises, while the official China manufacturing purchasing managers ' index usually reflects large enterprises. HSBC's July China PMI, at 49.4, fell below the 50 limit, and this month rebounded 2.5 to 51.9, the highest figure since June. "The PMI rally once again confirms that the momentum of China's economic growth is only moderately slow, not a slump," said Qu Hongbin, chief economist for China, HSBC. While external demand is likely to worsen over the next few months, strong domestic demand will support GDP growth of around 9% in the second half and 2011.　　Cai Jin said that demand-oriented indicators of growth relative to the supply of indicators faster, showing that aggregate demand and aggregate supply is moving towards a more balanced direction, which is also an important basis for the smooth development of the economy. Zhang Liqun, a researcher at the Development Research Center of the State Council, said a small rebound in the PMI index in August predicted a deep pullback in China's economy. Foreign trade exports have recovered strongly since this year, consumption growth is generally stable, investment growth has fallen, but the level of growth is still above 20%, so the future growth of China's economy will not fall sharply.　　But Zhang Liqun cautioned that there was a need to pay attention to the big increase in the price index of purchases, which could put pressure on corporate costs. The HSBC PMI data for the future or the maintenance of moderate growth reflects small and medium-sized businesses, and the new business in China has rebounded modestly in August after a two-month decline, indicating strong market demand and a successful promotional campaign. The August figures showed a rise in manufacturing output in the mainland, ending a two-month decline, although the gap remained larger this month compared with the pace of growth that was close to record highs at the start of the year. As for the reason for the increase in production, the respondents generally said that the new business volume increased in August, which is also 3 months since the new industryThe first increase in the volume of traffic.　　However, HSBC PMI data show that new business growth is mainly concentrated in the domestic market, the new export business has been a slight decline for the third consecutive month, August, the new export order index fell to 49.5, July was 49.8. The respondents who reported a reduction in export orders generally attributed the weak demand in overseas markets.　　However, some manufacturers also said that the price of products, weakened export competitiveness. The official PMI rally in August was largely a result of seasonal fluctuations rather than a pick-up in the real economy, Lu Commissar, a senior economist at Societe Generale, said.　　Since 2005, PMI has rebounded almost every year in August and September, even in the second half of the 2008 years of rapid economic growth.　　Cai Jin, vice president of China's Logistics and Procurement Federation, said the PMI rally helped allay fears of a slowdown in economic growth, but that the rebound did not mean that the PMI index was entering a fast-rising channel and that there was a greater likelihood of maintaining a moderate growth trend in the future. Nanfang Daily reporter Huangying Intern Song