Chinese bust intensifies

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Don’t be happy about the Caixin PMI. Pantheon:

A surprise bounce for the Caixin Services PMI

The improvement in the services activity index is unexpected, in light both of the rising Covid cases and tightening restrictions, and of the 1.5pp drop in the official services PMI for July. The explanation most likely lies in the different samples of the two surveys, and the concentration of recent Covid cases away from the coastal regions, which dominate the Caixin measure. The firms sampled have instead enjoyed a continued reopening rebound. New orders also rose, to 53.8 from 52.4, suggesting more activity in the pipeline, though the subindex is a poor predictor of the output index.

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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.