China PMI: on the up
When it comes to manufacturing indices, China is the big one. The question is which index to look at: the official state figures, or the widely-used HSBC/Markit index? They can often show different results.
For March, it’s relatively good news whichever index you pick. Official figures? Up, at 50.9. (50 is the mark that separates expansion from contraction), rising from 50.1 in February. HSBC/Markit? Up, at 51.6, higher than February’s 50.4. Continue reading »
Taiwan’s investors in China: insourcing, up to a point
Repatriating manufacturing back from China isn’t only a phenomenon of developed western markets.
Taiwan is home to many of the companies that helped build the Chinese contract manufacturing model and which continue to pour billions into the mainland. Yet Taipei, too, has been rolling out ambitious plans to bring those manufacturers back home. Will it work? Maybe. But as one economist points out, an equally interesting area to track is how Taiwanese companies are changing the way they invest into China. Continue reading »
Chinese celebrate India’s Holi
On Wednesday, the streets of India will be filled with men and women, boys and girls, flinging multi-coloured powder and water over one another as they celebrate the beginning of spring. The festival of Holi will end with stained carpets and hot baths, as people return home to spend time with loved ones – and probably drink bhang, a traditional brew brimming with cannabis.
It is a distinctively Indian sort of mayhem. Doesn’t sound like something the straight-laced Chinese could get involved with, does it? It is, though. Continue reading »
China flash PMI: reasons to be down, reasons to be cheerful
What to make of Monday’s China flash purchasing managers index from HSBC, given the distorting impact of the Chinese New Year holiday?
With a reading of 50.4 (just above the 50 threshold that separates contraction and expansion), there’s something in it for bulls and bears alike. Continue reading »
China surplus: smaller but stickier?
Long assailed for running a massive trade surplus with the US, China has come out as the big winner from a new method for calculating global trade flows. When “value added” production is factored in, China’s surplus vis-à-vis the US shrinks by 25 per cent, according to the World Trade Organisation and the Organisation for Economic Cooperation and Development.
These are important findings that Beijing will no doubt cite the next time it wants to repel foreign criticism of its export and currency policies. But the calculations also give rise to a knock-on question: could China’s surplus prove to be stickier precisely because it still has a ways to go up the value chain? Continue reading »
China: flash PMI number gives hope to manufacturing and markets
There are further signs that the recovery in China’s manufacturing sector is taking hold, even if Santa Claus hasn’t been ordering an awful lot from China this year.
December’s flash HSBC/Markit China purchasing managers’ index stood at 50.9, a 14-month high and an improvement from November’s 50.5. A sub-index for new orders also rose for the fifth month to 52.7, the highest level since April 2011. Continue reading »
China flash PMI – green shoots sprout
China’s flash PMI – released on Thursday by HSBC – marked a small, but key moment in China’s recent economic narrative. For the first time in over a year, the gauge showed expansion in the manufacturing sector with a reading of 50.4.
It follows promising October data for trade, retail sales and investment. China’s official PMI already showed expansion in the sector last month. Continue reading »
China’s recovery: alphabet soup
Assigning letters to economic trajectories was very much in vogue back in 2009. Would recoveries be ‘V’, ‘W’ or ‘L’ shaped? Now the craze seems to be coming to China.
October’s official PMI data showed that China’s factories are back to growth – just. But analysts disagree about whether this points to a big turnaround. Continue reading »
China inflation: friend not foe
Does Chinese industry need more inflation?
The question might seem absurd for a fast-growing developing economy but with consumer prices increasing at just two per cent, Gavekal Dragonomics, the China economic research consultancy, is arguing that inflation is “more a friend than a foe.” Continue reading »
Made in Mexico gains ground on China
A few years ago, anyone seriously trying to suggest that Mexico had the edge on China in the realm of manufacturing exports would probably have been ridiculed and then invited to keep all future arguments strictly to themselves.
But since 2010, a growing number of academics, trade experts, bankers and economists has begun to entertain the once seemingly-implausible idea that Mexico is actually holding its own.
The latest voice in the chorus is Marco Oviedo from Barcalys, who this week published a fascinating research note that concludes, “after lagging Chinese manufacturing exports for a decade, Mexico has taken the lead post-2008-09. We believe this change is likely to be structural and persistent”. Continue reading »
Goodbaby shares jump 10% on results
A successful transition from cheap, contract manufacturer to high-end, consumer brand name is the holy grail for many Chinese companies. One company is making progress.
Goodbaby International Holdings, the world’s largest maker of baby strollers, has announced a 27 increase in its profit from core operations to HK$119.3m in the first half of the year as well as a 17 per cent increase in sales to HK$2.311bn.
“For us, it’s bright in the east and bright in the west. Sales of our own-brand products have gone up a lot in the US and in Europe despite those regions’ economic woes,” said chairman Song Zhenghuan. Investors seemed more than happy with the results, marking the shares up 10 per cent. Continue reading »
China’s factories feeling the pain
While China’s official PMI reading came in weaker than last month – and only a whisker above the key 50 level – the alternative manufacturing gauge, put together by Markit and HSBC, showed continued contraction.
While the headline number of 49.3 is the closest the measure has come to the 50 mark in months, the index was actually revised down from the flash estimate earlier in the month. Continue reading »
China manufacturing improving, but job worries mount
A brighter start to the second half of 2012? The latest purchasing managers’ index for China’s manufacturing sector, as measured by HSBC, moved back closer to the 50 mark – the number that separates expansion from contraction.
China’s flash PMI for July was 49.5, up from 48.2 in June. Does this mean the recent revival measures for the economy are working? Continue reading »
China: innovating more than copying
It is all well and good to cut interest rates, but Beijing mandarins know better than anyone else that what China needs is not a stimulated economy, it needs a more innovative one.
Now there is some surprisingly good news on that front from Booz & Co, the management consulting firm in Beijing. They asked multinational and leading Chinese companies with mainland operations whether China was catching up with the world in terms of ability to create rather than fake – and found that 45 per cent of multinationals said some of their mainland competitors were just as innovative – or more so – than the multinationals themselves. Continue reading »
China PMI: staying afloat
As Simon Rabinovich writes on FT.com, China’s official purchasing managers’ index for manufacturing rose to 53.3 in April, its highest level in more than a year – giving further hopes for a soft landing for the economy.
Here’s a chart that tells the story: Continue reading »
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