Guest Commentary: Chinese Official/Unofficial Figures Diverge
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:
Chinese PMI divergence by Also Sprach Analyst – official figures show growth while unofficial figures point to deeper contraction
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?
By Yohay Elam, Forex Crunch
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