• The NBS manufacturing PMI improved slightly in May and so paints a more resilient picture of the Chinese economy than the HSBC manufacturing PMI which showed a marked decline in May in its final reading. Hence the two manufacturing PMIs send very conflicting messages. The NBS PMI suggests the Chinese economy is moving sideways with growth slightly below trend while the HSBC PMI suggests continued deceleration.
• The development in the NBS manufacturing PMI is most consistent with the development in leading indicators which have so far not indicated renewed deceleration in the Chinese economy. We expect GDP growth to remain around 8% q/q AR in the coming quarters with a slight improvement in H2 13. GDP growth needs to ease below 7.5% before Chinese policymakers will consider additional easing.
Click here to read the full report: Economic Research
Danske Bank