MAY 2ND 2016
CHINA’S BUSINESS ACTIVITY STABILISING AT SLOWER PACE
Despite financial stimulation, China’s publishing managers’ index (PMI) was not up to expectations. Official data on business activity was reported at 50.1 in April, barely above the 50-point mark that separates expansion from contraction.
Experts were hoping for an expansion about 50.4, hoping that financial stimulation in the last few months would show stronger signs of market stabilisation. Nonetheless, measures have not been fruitless. China’s non-manufacturing PMI showed modest expansion, about 52.2, almost the same than March.
Special consideration should be taken for reports suggesting that factories are stockpiling less raw materials, and have been drawing heavily on inventories of finished goods. This shows a careful consideration about the future of the international market by Chinese suppliers.
Overall, there are strong signs of stabilisation. Nonetheless, rapid increasing housing prices, layoffs in the steel and iron ore sector, and expansion of national debt will continue putting pressure on the country’s central bank.
Annex Asia Publishing