MOSCOW, September 23 (RIA Novosti) – A preliminary Purchasing Managers Index (PMI) reading, a monthly survey of Chinese manufacturers and a reflection of the country's economy, reached 50.5 in September – an unexpected increase from a final reading of 50.2 in August amid expectations of a slowing Chinese economy, The Wall Street Journal reported Tuesday.
"I was surprised. I thought manufacturing would suffer from the downturn in real estate, but the recovery in orders both domestically and abroad with exports explains [the uptick in the PMI]," Dariusz Kowalczyk, a Hong Kong-based economist at Credit Agricole CIB was quoted as saying by the newspaper.
"That is reassuring for people worried about the downturn in the economy," Kowalczyk added.
The survey conducted by HSBC Holdings and data provider Markit could be an indicator of stabilization, but showed a mixed picture overall, according to the newspaper, which explained that data which tends to focus on smaller, private and export-oriented companies, revealed an increase in new export orders despite a decrease in employment.
"I don't understand why the PMI rebounded this month. I was expecting something below 50. … There are few signs of improvement in September's economic activities. Investment is still slowing and home sales continue to drop. Weak commodities prices still point to sluggish domestic demand. Export growth could have lent support but external demand has been solid for the past few months," Shen Jianguang, chief Asia economist at Mizuho Securities Asia said, WSJ reported.
China's economy stalled this quarter as both retail and residential real estate sectors struggled. However, its manufacturing and transportation sectors began to improve, Bloomberg reported. Investment has also slowed along with decreasing bank loans, and China's imports still far exceeded its exports.
A final reading from HSBC at the end of the month along with China's official PMI reading, monitoring larger state-owned companies to be released October 1, will give economists a clearer view of the country's economic outlook.
On Monday, China's uncertain economic and development outlook pushed down oil prices, in turn weighing down the stock market. Energy stocks saw the biggest losses, falling by 1.4 percent. Economists believe the world's second-largest economy can recover through increased spending on social housing, mortgage support and through property reforms.
