Official Chinese figures are always treated with a significant amount of doubt by the markets. Nevertheless, the publication still has a strong impact.
However, the recent divergence of the official manufacturing PMI and the unofficial HSBC/Markit PMI makes the grain of salt a bit bigger.
For the month of May, the unofficial figure showed deeper contraction, with a score of 48.7 points. This happens as the official PMI remains well above the 50 point mark.
This chart by Also Sprach Analyst shows it nicely:
Also electricity usage and comments from Australian companies trading with China lean towards the unofficial, more downbeat figures.
It seems that also Chinese policymakers don’t really believe their own figures: China recently lowered its interest rate for the first time since 2008.
The world is focused on Greece and Spain, yet the slowdown in China and in India probably has a more significant impact on the world.
Further reading: The ECB Pushed Spain to the Bottom – Will it Pull Spain Out Now?
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