Tuesday, September 3, 2013

China’s Economy Perking Up (excerpt)

The manufacturing purchasing managers' index (M-PMI), compiled by China’s National Bureau of Statistics, rose to 51.0 in August from 50.3 in July, the highest level since last April and ahead of market expectations of 50.6 in a Reuters poll. The official survey showed an across-the-board recovery in all sub-indexes, ranging from new orders and quantity of purchases to input prices and employment, pointing to a positive picture for the huge factory sector.

Confirming the strength of China’s economy are electricity output and crude oil usage. Both rose sharply during July to new record highs. On August 13, I noted that an exclusive report in South China Morning Post revealed that the “mainland government is quietly offering financial stimulus to key cities and provinces to help them maintain local economic growth.” Instead of massive economy-wide stimulus, the government is targeting big projects around the country to stimulate growth. The new approach seems to be working.

Today's Morning Briefing: (1) Postponed US attack on Syria is a relief for market. (2) So are lots of strong global economic indicators. (3) A quick tour of the World according to MSCI. (4) World earnings estimates still falling, but a hint of better times from recent revenue estimates. (5) China’s bottom-up stimulus may be working. (6) Improving UK economy starting to discredit the anti-austerians. (7) Euro zone continues to show upside surprises. (8) US exports revision confirms improving global economy. (9) Reviews are mixed for Abenomics. (10) “Closed Circuit” (-). (More for subscribers.)

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