We are starting to see early signs of business activity stabilization in China. Two leading indicators are particularly helpful:
1. The November HSBC/Markit flash PMI went into expansion territory for the first time in over a year.
Hongbin Qu, Chief Economist at HSBC: “As November’s flash reading of HSBC manufacturing PMI bounced back to the expansionary territory for the first time in 13 months
, this confirms that the economic recovery continues to gain momentum towards the year end. However, it is still the early stage of recovery and global economic growth remains fragile. This calls for a continuation of policy easing to strengthen the recovery.”
China HSBC PMI
2. The November MNI China Business Survey recovered sharply, particularly on a seasonally adjusted basis - as adjusted by the ISI Group (chart below). Just as an aside, the ISI Group continues to do great work on China economic research - thanks guys!
China MNI Business Survey
These latest figures seem to indicate that a "hard landing" in China has been avoided, at least for now. If the trend continues, both China and the US should provide some support to global growth.