Stabilised Industrial Sectors Signal More Focus on Reforms

Economic Research	01 November 2016
China
Economic Highlights
Stabilised Industrial Sectors Signal More Focus on Reforms China’s manufacturing PMI much surprised the market on the upside in Oct 2016. Rising new orders and output numbers indicate industrial sector will stabilise further in the near term. But 66-month high input prices may result in higher production cost in a longer term. Looking ahead, government’s pro-growth policies, rising commodity prices and growing manufacturing PMIs in advanced economies may continuously support China’s industrial sectors in the coming months. But we still remain cautious regarding to a longer term recovery, amid tightening measures in property market and speed-up of supply-side reforms. Policy wise, despite liquidity condition became tight due to more capital outflows caused by recent CNY depreciation, the central bank will stay with its prudent stance. The monetary authority will more frequently use MLF and open market operations to pump more liquidity into the market. Economist:  Zhang Fan| +8621 6288 9611 ext 105
To access our recent reports please click on the links below: 19 Oct: Little Surprise, While Underlying Problems Remain 14 Oct: First PPI Expansion in 55 Months 13 Oct: Lower-Than-Expected Trade Numbers Reflect Weak Demand Recovery 10 Oct: Near-term Stabilisation, But Concerns Remain 04 Oct: Manufacturing Sector Stabilised In The Near Term 13 Sep: Stabilising Economic Conditions Amid Supports From Government