A flash PMI (purchasing managers' index) measure
of Chinese manufacturing activity rose to an 18-month high in July, in a sign
that the government's efforts to stimulate the economy are having an impact.
The flash China Manufacturing PMI at 52.0 in July
(50.7 in June) was at an 18-month high while the flash China Manufacturing
Output Index at 52.8 in July (51.8 in June) was at a 16-month high.
The HSBC Flash China Manufacturing PMI is
published on a monthly basis ahead of final PMI data, making the HSBC PMI the
earliest available indicator of manufacturing sector operating conditions in
China. The estimate is typically based on approximately 85%–90% of total PMI
survey responses each month and is designed to provide an accurate indication of
the final PMI data. July final PMI data will be released on 1 August 2014.
Hongbin Qu, chief
economist, China & Co-head of Asian Economic Research at HSBC
said: “The HSBC China Manufacturing PMI rose further to 52.0 in the flash
reading for July. Both new orders and new export orders expanded at a faster
pace than in June. The employment and prices sub-indices also improved.
Meanwhile, stocks of finished goods contracted at a slower pace. Economic
activity continues to improve in July, suggesting that the cumulative impact of
mini-stimulus measures introduced earlier is still filtering through. We expect
policy makers to maintain their accommodative stance over the next few months to
consolidate the recovery.”