China gains momentum
The HSBC preliminary purchasing managers' index (PMI) for September hit 51.2, the highest since March when it stood at 51.6, HSBC said on Monday.
The result was higher than last month's final reading of 50.1, which had improved from an 11-month low of 47.7 in July and ended three months of contraction, according to the bank.
The index tracks manufacturing activity in China's factories and workshops and is a closely watched gauge of the health of the world's second-largest economy. A reading below 50 indicates contraction, while anything above signals expansion.
The first half of this year saw analyst concerns about China's economy mount after an expected rebound from growth of 7.7 per cent last year - the worst performance in 13 years - failed to materialise.
The September figure suggested China's ongoing growth rebound is consolidating on the back of "simultaneous improvements" in overseas and domestic demand, HSBC economist Qu Hongbin said.
"We expect a more sustained recovery as the further filtering-through of fine-tuning measures should lift domestic demand."
Frequently Asked Questions about this Article…
HSBC's preliminary purchasing managers' index (PMI) for China in September registered 51.2, the highest reading since March (when it was 51.6). That was up from last month's final reading of 50.1.
A PMI above 50 signals expansion, so a 51.2 reading indicates China's factory activity expanded in September. The PMI tracks activity in factories and workshops and is a closely watched gauge of the health of the economy.
The stronger PMI suggests China’s manufacturing rebound is gaining momentum, driven by improving overseas and domestic demand. Because the PMI is a timely indicator of economic activity, investors often use it to gauge near‑term demand trends and economic momentum in the world’s second‑largest economy.
The PMI improved from an 11‑month low of 47.7 in July (a contraction reading), rose to a final reading of 50.1 in August (ending three months of contraction), and reached a preliminary 51.2 in September.
HSBC economist Qu Hongbin said the September figure suggests China’s ongoing growth rebound is consolidating on the back of simultaneous improvements in overseas and domestic demand. He also expects a more sustained recovery as fine‑tuning measures filter through to lift domestic demand.
Yes. The first half of the year saw analyst concerns after an expected rebound failed to materialise following last year’s growth of 7.7 percent, which the article describes as the worst performance in 13 years.
The PMI is a timely, widely watched indicator of manufacturing health and demand. For everyday investors, it can be a useful piece of macro information—alongside other data—when assessing the strength of China’s economic momentum and potential implications for markets or businesses linked to Chinese demand.
No. The article indicates the September PMI suggests the rebound is consolidating and HSBC expects a more sustained recovery as policy measures filter through, but it does not claim the recovery is guaranteed.
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