Economists React to China's PMI Numbers


by NTDTelevision

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The China National Bureau of Statistics announced earlier this week that China's Purchasing Managers Index, or PMI, was 49.8 in September. That's a rebound of 0.6, and the first rebound since May.

A PMI higher than 50 means that manufacturing is expanding; lower than 50 means it's contracting. PMI is often used as a sign of the general health of the economy.

But business professor Frank Xie says that the official government figures should be taken with a grain of salt.

[Prof. Frank Xie, University of South Carolina, Aiken Business School]:
"The CCP's PMI number, like its other numbers, are not true to a certain extent. Errors in the statistics and the intention to create an appearance of economic recovery might have all led to this figure. It is not surprising. We cannot trust the CCP's numbers."

HSBC, which does its own PMI survey, announced a PMI of 47.9 percent. That's the same as last month, and lower than the official government number.

The Wall Street Journal says the difference is because Chinese government's PMI focuses more on large-scale state-owned enterprises than private exporters. And these enterprises are less affected by the current economic slowdown.

Some economists had previously predicted that the Chinese economy could rebound in the third or fourth quarter. But economist Mao Yushi says the root causes of China's economic problems haven't been addressed.

[Mao Yushi, Economist]:
"The problems in the European Union are not resolved yet, so our exports have been on the decline. There is no significant change in the domestic financial sector. Monopoly industries still have high profits, and private enterprises operate with difficulties. These circumstances have not improved. It is not possible for the Chinese economy to rebound. Personally, I do not see a reason for it to pick up."

September's PMI numbers indicate a seventh straight month of economic slowdown. Analysts expect Chinese leaders to respond with more policy loosening ahead.

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