China’s PMI softended in the first three weeks of September according to HSBC’s PMI index. The headline figure declined to 49.4 in September from 49.9. Hongbin Qu, HSBC’s China Chief Economist commented on the slowing growth:
“This is a similar moderating growth picture as in the previous two months. Fears of a hard landing are unwarranted. External demand weakened a little but official trade data still show solid export growth. China is less dependent on net exports, whose contribution to GDP growth was almost zero in 1H. Resilient domestic demand is sufficient to support around 8.5-9% growth in the coming quarters.”
It’s clear that China’s growth continues to moderate although we’re not seeing a steep contraction in growth. Regardless, this is another sign of a generally fragile global economic situation.