Chinese data show further weaknesses
Today’s published HSCB Flash China Manufacturing Purchasing Managers Index fell for the third month in a row, or from 48.2 points in June to 47.7 in July, thus potentially testing the policy makers to rebalance the economy and avoiding using major stimulus measures to boost growth. The measure fell at the fastest rate for almost a year, signalling one of the steepest downturns witnessed.
The one area of strength, China’s employment sector fell at its steepest rate since March 2009. Before, there were no signs of major job cuts. The Chinese government has stressed that it is watching growth in terms of its impact on the labour market, thus it appears that the fine tuning measures are needed. As to manufacture, the declining figures mean less orders and faster destocking.