Prieur du Plessis at Seeking Alpha says:
I do not foresee any significant growth in new export orders for China’s manufactured goods. To keep the wheels of China’s industries rolling internal consumption needs to be boosted and consumer confidence restored. I believe that the first of many salvos of stimulatory measures have been fired to rekindle the economy. Recently the reserve requirements of Chinese banks have been lowered and yesterday the China Daily reported that “New measures will be introduced to boost consumption, especially for vehicles and electrical appliances, as export demand weakens. Ministry of Commerce spokesman Shen Danyang also said the ministry is mulling over launching new programs, expected to be announced next week, on expanding domestic consumption.”
The Chinese authorities have despite heavy criticism shown their mettle during the great 2008/2009 crisis by successfully pump-priming the economy and turning the economy long before any of the other major economies. But it is early days still.
Will China’s manufacturing sector continue the apparent recovery in January? I think that the manufacturing PMI will remain under pressure in January – not because of weakening economic fundamentals, though. The impact of the preparations for the Chinese New Year celebrations that begin on January 23 and last until January 28 is significant.
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