Chinese official manufacturing survey drops

China's official manufacturing PMI fell to a six-month low in January, dropping to an expected 50.5 from 51 in December.

The reading adds to other data that indicate slowing growth in China, although at least the latest figure shows expansion - HSBC's PMI gauge dropped below 50 to 49.5 and indicated contraction.

The official readings for output and new orders fell, although they still showed growth, while jobs and export orders shrank at a faster pace.

However, part of the decline last month was attributed to the approach of the Lunar New Year, due to production slowing down as people traveled home for the week-long holiday.

Because of the festival, Chinese markets won't be able to react for a number of days.

Comments (12)
  • june1234
    , contributor
    Comments (4476) | Send Message
    China markets are closed through Friday this week
    2 Feb 2014, 05:34 AM Reply Like
  • StayCool
    , contributor
    Comments (214) | Send Message
    I am more confident of HSBC's numbers that the 'official' Chinese data.
    It is worse than that!
    2 Feb 2014, 08:55 AM Reply Like
  • The Long Tail of Finance
    , contributor
    Comments (1750) | Send Message
    Yeah. Whenever China's figures "drop" it's always just enough to be satisfactory, but never enough to cause panic.
    2 Feb 2014, 09:42 AM Reply Like
  • Gedankonomist
    , contributor
    Comments (1050) | Send Message
    HSBC--that's the bank where you need permission and a "valid" reason to withdraw cash from isn't it?

    2 Feb 2014, 07:54 PM Reply Like
  • leopardtrader
    , contributor
    Comments (3800) | Send Message
    There is nothing bad about China official data. It is almost same as HSBC numbers..besides HSBC tracks smaller companies than official data that tracks large ones. This mentality that somehow China manipulates their numbers is simply ridiculous. What does such manipulation fetch them? Or for years now have China not grown majorly in real terms? $AAPL iphone sold 29million in just 3 months even without China Mobile deal ? Ask Ford, GM , MCD and many other companies doing business in China what their numbers are to really appreciate what is happening. Many cynics have been left out of this boom just as they were left out in the market since 2009 lows. Best approach is jump into a plane and spend a month or so in China. If you have the acumen you will understand what is going on. Just forget all these surveys. Even in USA or Europe ..they are still questionable. At least we all know that NFP numbers gotta be seen by the president a day or two before the public. Why that? Maybe National security concerns..haha
    2 Feb 2014, 09:15 AM Reply Like
  • Newbie trader
    , contributor
    Comments (386) | Send Message
    China, I believe, is a closed economy. I think, not that I know, their government officials would be blamed for a bad economy. I would assume a one party system with so many possible social woes advertised by its so many opponents, could be quite harsh on officials not meting the economic quota or so I believe.


    Well, that's certainly nothing wrong with their numbers, I am sure or not. But, their number it's not as rosy this time, not that it matters or not. Of course it couldn't be that the Chinese economy is actually contracting and the officials are just too afraid to report it. I mean the Chinese officials and their families, according to malicious rumors, are all immigrating to other countries or not.
    2 Feb 2014, 01:31 PM Reply Like
  • The Long Tail of Finance
    , contributor
    Comments (1750) | Send Message
    >>At least we all know that NFP numbers gotta be seen by the president a day or two before the public. Why that?
    I know the Fed gets the figures ahead of time, because they run monetary policy and to try to anticipate market recation on Fed open market operations.
    2 Feb 2014, 10:02 PM Reply Like
  • The Long Tail of Finance
    , contributor
    Comments (1750) | Send Message
    They manage their PMI statistics like their currency, gradually.
    2 Feb 2014, 09:44 AM Reply Like
  • leopardtrader
    , contributor
    Comments (3800) | Send Message
    In every country data is seen by the authorities before release to the public. Authorities afterall wont just allow any data especially when elections are by the corner lol
    2 Feb 2014, 11:20 AM Reply Like
  • FreedomFOA
    , contributor
    Comment (1) | Send Message
    You're not saying they manipulate data
    2 Feb 2014, 12:36 PM Reply Like
  • archie4u
    , contributor
    Comment (1) | Send Message
    China's official manufacturing PMI is, in deed, the only report off of China that is to be trusted off of China. HSBC's PMI, on the other hand, should be totally ignored. HSBC clearly manipulates its figures in line with its trading desk positions. China's official manufacturing PMI actually beat market expectation as market participants traded factoring in whisper numbers for China official PMI in the range of 48.7 to 49.9, for an average expectation 49.3
    The reported PMI of 50.5, therefore, beat the whisper number of 49.3 by a wide margin. Translation: Market will gap up on Monday morning and by the end of the week S&P may very well hit another record high as shorts will scramble to cover their positions.
    Case in point, HSBC's PMI numbers crashed the future's market (ES, NQ) overnight on January 23rd and investors in the US woke to an S&P which broke its 50 day moving average, hence the volatility for the last 6 trading sessions.
    Experienced traders ignore ADP's employment report and rather pay attention to the U.S. Bureau of Labor Statistics “unemployment situation” report.
    Going forward, much like the ADP report, HSBC's PMI report should be ignored.
    2 Feb 2014, 12:51 PM Reply Like
  • pat45
    , contributor
    Comments (470) | Send Message
    Agreed too many institutions make a ton of money by issuing reports positive and negative..I trust government more, but not much more...esp hate china government.
    2 Feb 2014, 07:10 PM Reply Like
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