The soft patch may not be so soft after all, at least not in China. When the country’s May manufacturing purchasing managers index (M-PMI) was released on May 31, investors fretted when it fell to a nine-month low of 52.0. When China’s May trade data came out last week, investors were disappointed by the weakness in exports, and unimpressed by the strength of imports. On June 13, China released data onM2 and commercial bank loans during May. The former was up $145.6 billion m/m and the latter rose $85.1 billion m/m. Those are both solid increases. The average monthly increase in China’s M2 from January through April was $172.1 billion. Over the same period, bank loans rose $87.5 billion, on average.
There is a strong correlation between China’s real GDP growth rate on a y/y basis versus the yearly percent change in the three-month average of electricity usage in China. During April, electricity usage was up by 13.4% on this basis from a recent low of 6.2% during December 2010. (We update these charts regularly for subscribers to our service in our China Briefing Book.)