We have been writing about the great stress that of the Chinese Financial System. One of the outputs of this is likely to show up in manufacturing data. Every month HSBC produces a Chinese Manufacturing Purchasing Managers Index ahead of the actual PMI data that is released. In short, a reading of higher than 50 means that the Chinese manufacturing sector is expanding, and a reading below 50 means that Chinese manufacturing is contracting.
Key Points:
Flash China Manufacturing PMI at 48.3 in February (49.5 in January). Seven month low.
Flash China Manufacturing Output Index at 49.2 in February (50.8 in January). Seven month low.
Data collected 12–18 February 2014.
These charts show a downward trajectory in Chinese manufacturing, which is consistent with a Chinese financial system that is under stress.
