China: Manufacturing conditions improving - Westpac

Elliot Clarke, Research Analyst at Westpac, notes that in contrast to many other major nations across the globe, China’s official PMI survey highlighted that manufacturing conditions improved in the month to the strongest level since September 2017, and before that July 2011.

Key Quotes

“Though global momentum looks to have slowed marginally, external demand for Chinese manufactured goods strengthened in the month, as did domestic demand. It is likely that this is a peak for momentum overall; however, China will probably be able to sustain momentum better than most.”

“So far in 2018, we have seen fixed asset investment recover from its 2017 lows, while growth in the consumer sector sustained a robust pace. This combination is not enough to stop aggregate growth slowing, but it will form a strong foundation for growth to remain near the level authorities are targeting for 2018 (“around 6.5%”). We are forecasting growth of 6.3% and 6.1% for China in 2018 and 2019, down from 6.9% in 2017.”