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China Output Contracts at Quickest Pace in 18 Months

  • Written by Syndicated Publisher No Comments Comments
    March 27, 2014

    The HSBC Flash China Manufacturing PMI shows Output Contracts at Quickest Pace in 18 Months. The overall PMI index, new orders, and production were all lower.

    Key points
    • Flash China Manufacturing PMI™ at 48.1 in March (48.5 in February). Eight-month low.
    • Flash China Manufacturing Output Index at 47.3 in March (48.8 in February). Eighteen-month low.

    Commenting on the Flash China Manufacturing PMI survey, Hongbin Qu, Chief Economist, China & Co – Head of Asian Economic Research at HSBC said: “The HSBC Flash China Manufacturing PMI reading for March suggests that China’s growth momentum continued to slow down. Weakness is broadly-based with domestic demand softening further. We expect Beijing to launch a series of policy measures to stabilize growth. Likely options include lowering entry barriers for private investment, targeted spending on subways, air-cleaning and public housing, and guiding lending rates lower.

    In the face of an explosion of credit, still growing imbalances, malinvestments, property and other bubbles, it is a mystery why anyone expects China to make efforts to “stabilize growth”.

    To stabilize growth implies more bad loans and more SOE malinvestment. Given China’s massive housing vacancies, support for still more housing is ridiculous.

    More malinvestment is possible of course, but the longer China attempts to keep the credit party going, the worse the ultimate implosion.

    Read more at 

    http://globaleconomicanalysis.blogspot.com/2014/03/china-output-contracts-at-quickest-pace.html#GHz3bOOOADxUvG73.99

    Images: Flickr (licence attribution)

    About The Author

    Mike Shedlock / Mish is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.  Visit Sitka Pacific’s Account Management Page to learn more about wealth management and capital preservation strategies of Sitka Pacific.

    You are currently viewing my global economics blog which typically has commentary every day of the week. I am also a contributing “professor” on Minyanville, a community site focused on economic and financial education.  Every Thursday I do a podcast on HoweStreet and on an ad hoc basis contribute to many other sites.

    When not writing about stocks or the economy I spend a great deal of time on photography and in the garden. I have over 80 magazine and book cover credits. Some of my Wisconsin and gardening images can be seen at MichaelShedlock.com.

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