China’s Dueling PMIs: Official Expands, HSBC Contracts

Global Macro Monitor

The markets must make a choice on Monday as to what China Purchasing Managers’ Index — official or the HSBC — they want to focus on and believe.

The official data released  today by National Bureau of Statistics shows the Purchasing Managers’ Index (PMI)  expanding to an 11-month high of 53.1 in March from 51 in February, beating forecasts of 50.5.

The HSBC PMI was also released today and came in very weak at 48.3 in March, down from 49.6 and the fifth successive month-on-month deterioration in manufacturing.  The report notes for the first quarter as a whole, the index averaged its lowest reading since Q1 2009.

We’re not China specialists but we assume the HSBC seasonally adjusts the data and apparently gives more weight to trends in the export sector.   Zhang Liqun, a researcher with the Development Research Centre of the State Council did seem to recognize…

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