China PMIs: Encouraging

Posted December 4, 2012 by rvillareal

• November PMIs suggest that China’s manufacturing sector has bottomed out and is en route to recovery. In particular, the Export Orders sub-index of the PMI inched into expansion territory for the first time in six months.
• Still of concern however, are sub-expansionary readings for Employment and Import PMIs.
• Nevertheless, so as long the U.S. economy continues to grow and a full-fledged global financial crisis is avoided, China’s real GDP could grow 7.5%-to-8% range during the last quarter of 2012 and possibly pick up to 8%-to-8.5% in 2013.
• Policymakers’ stance should remain expansionary albeit limited given uncertainties. Any deep stimulus program should be regarded as a surprise.

[private]12-3-12–EMG INDICATORS AND INSIGHTS (China PMIs)[/private]