The intriguing Chinese economy

Author: Showeng Last week, a statistic from China became a magic wand to disturb global capital markets, not only when the Shanghai Composite Index plunged nearly 7%, but also dragged global stock markets tumbling and the Dow Jones index fell below million points. The PMI index, the full name Purchasing Manager index (PURCHASINGMANAGERSINDEX), is an unofficial statistic that reflects the boom in manufacturing.　　Typically, a PMI above 50 indicates that the economy is expanding, and below 50 indicates that the economy is shrinking. On July 1, HSBC's PMI dropped to 50.4 from 52.7 in May, hitting a tipping point at a 14-month low.　　Meanwhile, the PMI index, published by China's Logistics and Procurement Federation, fell two months in a row, from 53.9 in May to 52.1 in June, and 11 to a 10 drop in the index, the only increase being "manufactured inventory". "Nervous investors have another reason to worry: a series of reports on the manufacturing situation seem to suggest that factory activity is slowing in many parts of Asia and may even have been diverted to the downward trajectory in China."　　"The FT wrote last weekend, but the report also noted that China's economy is moving from dizzying growth in the first quarter of this year (GDP growth of 11.9% per cent) to a much-needed slowdown rather than a slowdown." The Hong Kong Oriental Daily, published on the same day, pointed to signs that the overall growth of the manufacturing sector was past, followed by double pressure on inventories and costs, and that China's economy would fall. reported that after the European debt crisis, foreign trade exports, although the data is strong, but after all, is lagging behind, but the export tightening has been the mountain rain.　　However, by this situation, continue to abolish export tax rebates, but also face a rise in corporate wages, and the euro to weaken the exchange rate of water, a combination of various effects, will naturally lead to PMI fall back. This week, the world's media continued to heat up the debate over China's economic trends triggered by PMI data. The Wall Street Journal published two articles, "a soft landing for China's economy" and "a confusing mix of Chinese economic data". The previous article quotes HSBC analysts as saying the Chinese economy is "overly" worried about a hard landing. PMI data showed slowing growth in China's manufacturing sector, in part because the government's tightening measures were starting to work. The latter article argues that the PMI slide was puzzling, as China's exports reached a record $136 billion trillion in the previous May. And China Sea Container Transportation Co., Ltd. said, because the shortage of containers may increase freight. But at the same time, other indicators suggest that trade is slipping. Since the end of May, the Baltic Dry bulk shipping index has fallen sharply, has fallen by more than 40%. One explanation for these conflicting signals is that the container-ship market, which transports raw materials for Chinese factories, is weakening, but the container market for exports of finished goods remains strong. Analysts are further of the view that China's slowdown will be in the future, for steel, cement, non-ferrous metals, chemicals, coking coal andPrices of commodities such as iron ore are under pressure.　　VOA's report, "not unduly worried about the slowdown in China's economy", points out that a slowdown in the Chinese economy will be a disappointment to the world market but conducive to China's continued growth. Ben Leze, senior economist at BMO Bank in Canada, said in an interview with VOA that it would be a shock to the world if the Chinese economy slowed sharply from nearly 12% per cent in the first quarter to 8% in the quarter. He said: "This will certainly be a big shock to most countries in the world." The world market will not calmly treat this large deceleration ... Because of the relative weakness of the US economy and the extreme weakness of Europe's economy, China is the world's only economic growth engine. China's slowdown will naturally cause global unease. However, Leidseplein that a slowdown of 8% could be too pessimistic. The BMO Bank's forecast is that growth in the second quarter will be higher than 10%. Growth is likely to be close to 10% in the second half. Leidseplein pointed out that about 12% of the growth rate in the first quarter was temporary, no one thought it could be sustained, and there was no reason to be too pessimistic about the slowdown.