China’s Caixin releases Manufacturing PMI today
Chinese media group Caixin will today release its September update of the China General Manufacturing Purchasing Managers’ Index (PMI).
The monthly report surveys purchasing executives from 500 Chinese manufacturing firms and is seen as an estimate of the overall strength of the manufacturing-dependent Chinese economy. Last month’s report revealed a third consecutive month of manufacturing expansion in new orders and output, pushing the index to a nine-year high. If today’s report follows this upward trend, it will signal sustained recovery for the remainder of the calendar year.
Despite positive indications of short-term stability, China’s manufacturing industry faces extreme uncertainty in the medium to long-term. The threat of tariffs, deteriorating Sino-US relations and increasing wages have prompted firms—particularly those within the contract manufacturing sector—to shift investments abroad to Vietnamese and Indonesian markets. Recognising this shifting landscape, in May, President Xi Jinping announced a new economic model of “dual circulation”—a model aiming to expand domestic production for exports (international circulation) and domestic consumption (internal circulation). While changes supporting this model are expected, the longer-term outlook of China’s manufacturing industry remains opaque, despite a positive outlook for the near future.
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