The HSBC Flash China Manufacturing Purchasing Managers’ Index (PMI) is out for June and registered a solid bounce, increasing to 50.8 in June from 49.4 in May – a seven-month high.
The result beat analyst’s expectations, with economists polled by Bloomberg expecting the flash PMI to rise to 49.7 in June.
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Commenting on the result, Hongbin Qu, Chief Economist, China & Co-Head of Asian Economic Research at HSBC said:
“The HSBC Flash China Manufacturing PMI reading rebounded to a year to date high of 50.8 in June. The improvement was broad-based with both domestic orders and external demand sub-indices in expansionary territory. Inventory reduction quickened, and the employment sub-index also showed signs of stabilization. This month’s improvement is consistent with data suggesting that the authorities’ mini-stimulus are filtering through to the real economy. Over the next few months, infrastructure investments and related sectors will continue to support the recovery. We expect policy makers to continue their current path of accommodative policy stance until the recovery is sustained”…
It appears that the mini-stimulus announced by Beijing at the beginning of the year, in concert with the People’s Bank of China’s announced reserve requirement ratio (RRR) cuts, are having a positive effect on the Chinese economy.
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
