Manufacturing Sector Stabilised In The Near Term

Economic Research	4 October 2016
China
Economic Highlights
Manufacturing Sector Stabilised In The Near Term China’s manufacturing PMI remained unchanged in Sep 2016, but slightly missed market expectation. Output sub-index reached a 15-month high, while new orders sub-index narrowed down in the month, indicating recovery of demand remained sluggish. Looking ahead, we believe China’s industrial sector may somehow stabilise in the near term, amid rising government’s support. But in a longer term, challenges will still come from structural supply-side reform, more austerity measures in property market and potential threat from a rate hike in the US in late 4Q16. As such, China’s economic growth will still likely to soften in the coming quarters. On the policy front, the government will be keen to throw out more PPP projects, as a good supplement for fiscal spending; but the central bank will likely stay cautious in taking aggressive monetary easing moves. Economist:  Zhang Fan| +8621 6288 9611 ext 105
To access our recent reports please click on the links below: 13 Sep: Stabilising Economic Conditions Amid Supports From Government 09 Sep: CPI Could Have Already Dipped In Aug 2016 08 Sep: China’s Trade Terms Stabilise Amid Low-Base Effect 02 Sep: Mild Inflation, But Investment Growth Remains A Big Concern 01 Sep: Industrial Sector Improved, But Downside Risk Remains 09 Aug: Mild Inflation, But No Further Easing Of Monetary Policy Envisaged