China Manufacturing Contracts As New Export Orders See Biggest 2 Month Drop Since Dec2008

Tyler Durden's picture

Suddenly this morning's RRR cut doesn't feel quite so much like China doing Europe a favor. Chinese Manufacturing PMI printed at a lower-than-expectations 49, signaling its first contraction (<50) since Feb 2009. As if it was really ever so, as clearly concerns were growing since we had the Flash PMIs earlier in the month. Across the board, sub-indices were weak with New Orders and New Export Orders falling significantly as the latter remains below 50 and Inventories rose significantly. Notably New Export Orders have now fallen the most over two months since Dec 2008.

The overall index fell below 50 for the first time since Feb 2009.

And New Orders and New Export Orders continue to slide.

But the two-month drop in New Export Orders is very significant - as bad as entering the previous dramatic downturn.

Charts: Bloomberg

UPDATE: HSBC China Manufacturing PMI prints at 47.7, deteriorating at fastest rate (and lowest level) in 32 Months

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JSchroe's picture

buy the f*cking dip...Bernanke will fix everything.

Mike2756's picture

Reality sinking in already? All they got was a lousy 3 day rally. It's kind of looking like the end of July again.

max2205's picture

Well that was good for a 7% pop on the China market....rally is speading world (or not?!)

Popo's picture

Question.... what's the quickest way for China to get rid of a couple hundred million surplus laborers?

Because I have a feeling, that's their next move.

MachoMan's picture

export them to the african colonies...  to produce food, among other things.

StockInsanity's picture

Someone needs to order more Chinese Food

Sandusky's favorite, Sum Yung Boi

pragmatic hobo's picture

hmmm ... I thought it was BANG DA BOI ... but what do I know about Chinese food anyway?

adr's picture

no, no, no. AMERICAN MANUFACTURING WILL SAVE US!!!!!! Next month the Chicago PMI hits 9000. Hell it goes to one million!!!! When the stats are fantasy who cares.


It feels like playing fantasy football. 

ziggy59's picture

Lower than expectations?? That can't be right.. who the heck is in charge of that press release?


My expectations for this global economy are pretty low.  It would be pretty hard to not beat them. 

pragmatic hobo's picture

you know what this means ... Chinese central bank will now start to ease ... probably too late to stem the tide but it will be good for some kicks. Got copper?

DormRoom's picture

I've talked to some Chinese exchange students.  They say you need to own an apartment, if you want a girl to marry you.  So since there's a lot more males to females in China, thus huge male competition over wombs, real estate has become a huge dating issue.  I f you want to bone, you need to own an apartment.

trav7777's picture

i hear an iphone 4s can get the pussy over there

ucsbcanuck's picture

Dang! Now I know why that kid sold his kidney for an iPad! Pussy! 

DeadFred's picture

Probably cheaper to rent.

MachoMan's picture

It's not really any different anywhere...  and I also fail to see how anyone participating in such a regime can claim to see the situation as anything other than prostitution.

CrashisOptimistic's picture

If they're not getting orders, then what is being bought with all this supposed Christmas shopping?

jcaz's picture

Wow, you mean that China WASN"T trying to help out the rest of the world with their rate cut?


oogs66's picture

US and Europe aren't going to export themselves out of the problem, they will just stop importing.  What will China do then?

Teamtc321's picture

U.S. and Europe should tax China import's just as they do other's import's.  

lizzy36's picture

As a reminder in 2008 China's response to the "slowdown" (cough depression/revolution) was a stimulus equivalent to 20% of GDP (in the US that would have meant around a $4T stimulus).

Odd given this print that China doesn't have "want" to rescue the EU.

chump666's picture

...and credit expansion that would make your eyes bleed. 

chump666's picture

China is crashing into a stagflation hell spiral.  Frightening

ZeroPower's picture

Soft landing camp will increasingly have to start resorting to "IMPOSSIBRU!!!!"

TheFourthStooge-ing's picture

The soft landing camp will soon be shitting BRICs.


DeadFred's picture

Every country can get a temporary reprieve from domestic dissent by creating a strong foreign threat. China has a great deal of motive now to create a patriotic rallying event, most commonly this translates to a war. Sadly for the US this is not a card you get to play over and over and over again. We already had our 9/11 moment.

firstdivision's picture

So that's why the 10 year fell at 8.

lizzy36's picture

HSBC China November Final PMI 47.7 Vs October 51.0; Final PMI Down Vs Preliminary 48.0 [Dow Jones]

Mike2756's picture



"Thankfully, easing price pressures should provide some comfort to central bank officials and may open the scope for easing if activity tumbles more than expected in the coming months," Man said. 
Input prices continued to rise in November, but output prices fell for the first time in four months, HSBC said. 

Georgesblog's picture

There's a novel thought. China's production economy has to take desperate measures to crank the factories back up. They have to do that by competing with their currency. It wasn't so long ago that they wouldn't float their currency against other currencies. Now, they have to bend to keep civil unrest at bay. People without paychecks can't buy things.

chump666's picture

ZH post a chart of Chinese real deposit rates which are negative!  China is about to go into a world of hurt.  They print more...FUBAR x10

Caviar Emptor's picture

Does the real economy really matter? Is the actual business of America business? (Or anywhere else in the world for that matter?) Do such things as sales, profits, demand, supply or competition mean a thing? 

When an economy becomes sufficiently contrived and controlled the answer is NO. Politics will trump innovation, monetary policy will trump supply/demand and well-connected cronies will always starve out any 'competition'. The next steps in the evolution are inevitable: you'll be told what to buy, at what price and who to work for and for how much 

Teamtc321's picture

"Does the real economy really matter? Is the actual business of America business? (Or anywhere else in the world for that matter?) Do such things as sales, profits, demand, supply or competition mean a thing?" 


Only if you are a small business owner. The one with your own nut's on the line. They are flipping this bs system off, it's like trying to crawl through mudd 4' deep.


And they in the house wonder how to get un-employment down and wage growth up, lol.   

Everybodys All American's picture

Does this prompt the Chinese to some contrived conflict? Time will tell.

Randall Cabot's picture

Confucius say: Contraction bullish, buy stocks!

MFL8240's picture

Lets make sure I get this.  China which sells most of its shit to the US is not producing as much because consumption in the US is down, yet the US reported to the sheep today that the PMI was up.  ahahahahahahahahah!  Clown show!!


No fucking shit sherlock, this is a give me-no brainer rally, but how can anyone with even a grain of rationality trust it.

Teamtc321's picture

You can't imo, trader's all over feel like it is there first time in the ocean with 10' seas. Just a matter of time till you get smashed into a rock. 


China needs to now take lessons from the U.S. on how to really fudge...Err, Uhhh, present economic data.

LookingWithAmazement's picture

China can and will recover by lowering requirements. Bye bye "crisis".

Caviar Emptor's picture

We don't need no stinkin' manufacturing!

navy62802's picture

When you can just print money in order to manufacture profits, why should we worry about a slow-down in productive capacity? Right? Riiiight ...

Belarusian Bull's picture

China actually has more advantages in this systemic collapse than most of the countries.

1)It can produce most of the stuff for itself.

2)Being a very poor country, sagnificant drop in living standards won't impact it's stability very much.

3)Any inner resistance will be suppressed  by China's zerg army.

China's regime greatest advantage is that they don't really have to reckon with the people at all.