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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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Wed, 11/30/2011 - 21:48 | Link to Comment JSchroe
JSchroe's picture

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

Wed, 11/30/2011 - 21:54 | Link to Comment Mike2756
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.

Thu, 12/01/2011 - 02:55 | Link to Comment max2205
max2205's picture

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

Thu, 12/01/2011 - 07:37 | Link to Comment Popo
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.

Thu, 12/01/2011 - 11:28 | Link to Comment MachoMan
MachoMan's picture

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

Wed, 11/30/2011 - 21:51 | Link to Comment StockInsanity
StockInsanity's picture

Someone needs to order more Chinese Food

Sandusky's favorite, Sum Yung Boi

Wed, 11/30/2011 - 22:20 | Link to Comment SHEEPFUKKER
SHEEPFUKKER's picture

Cum on sum yung guy

Thu, 12/01/2011 - 00:24 | Link to Comment pragmatic hobo
pragmatic hobo's picture

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

Wed, 11/30/2011 - 21:52 | Link to Comment adr
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.

Wed, 11/30/2011 - 22:21 | Link to Comment SHEEPFUKKER
SHEEPFUKKER's picture

It feels like playing fantasy football. 

Wed, 11/30/2011 - 21:55 | Link to Comment ziggy59
ziggy59's picture

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

Wed, 11/30/2011 - 22:30 | Link to Comment SHEEPFUKKER
SHEEPFUKKER's picture

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

Thu, 12/01/2011 - 00:26 | Link to Comment pragmatic hobo
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?

Wed, 11/30/2011 - 21:56 | Link to Comment DormRoom
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.

Wed, 11/30/2011 - 21:57 | Link to Comment midgetrannyporn
midgetrannyporn's picture

Bang Dae Ho

Thu, 12/01/2011 - 00:21 | Link to Comment trav7777
trav7777's picture

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

Thu, 12/01/2011 - 00:28 | Link to Comment ucsbcanuck
ucsbcanuck's picture

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

Thu, 12/01/2011 - 01:59 | Link to Comment DeadFred
DeadFred's picture

Probably cheaper to rent.

Thu, 12/01/2011 - 11:31 | Link to Comment MachoMan
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.

Wed, 11/30/2011 - 21:55 | Link to Comment CrashisOptimistic
CrashisOptimistic's picture

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

Wed, 11/30/2011 - 22:02 | Link to Comment Schmuck Raker
Schmuck Raker's picture

Transient Self-Gratification?

Wed, 11/30/2011 - 21:57 | Link to Comment jcaz
jcaz's picture

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

Shocker.......

Wed, 11/30/2011 - 21:59 | Link to Comment oogs66
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?

Wed, 11/30/2011 - 22:08 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture

print?

Wed, 11/30/2011 - 22:41 | Link to Comment Teamtc321
Teamtc321's picture

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

Wed, 11/30/2011 - 22:11 | Link to Comment lizzy36
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.

Wed, 11/30/2011 - 22:27 | Link to Comment chump666
chump666's picture

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

Wed, 11/30/2011 - 22:25 | Link to Comment chump666
chump666's picture

China is crashing into a stagflation hell spiral.  Frightening

Wed, 11/30/2011 - 22:32 | Link to Comment ZeroPower
ZeroPower's picture

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

Wed, 11/30/2011 - 23:47 | Link to Comment TheFourthStooge-ing
TheFourthStooge-ing's picture

The soft landing camp will soon be shitting BRICs.

 

Thu, 12/01/2011 - 02:07 | Link to Comment DeadFred
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.

Wed, 11/30/2011 - 22:33 | Link to Comment firstdivision
firstdivision's picture

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

Wed, 11/30/2011 - 22:35 | Link to Comment lizzy36
lizzy36's picture

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

Wed, 11/30/2011 - 22:36 | Link to Comment TheLooza
TheLooza's picture

HOW YOU PAY!

Wed, 11/30/2011 - 22:58 | Link to Comment Mike2756
Mike2756's picture

http://www.gfmag.com/latestnews/latest-news-old.html?newsid=1.2092566E7

 

Hmmm...

"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. 

Wed, 11/30/2011 - 22:58 | Link to Comment Georgesblog
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.

 http://georgesblogforum.wordpress.com/2011/11/02/the-daily-climb-2/

Wed, 11/30/2011 - 23:08 | Link to Comment chump666
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

Wed, 11/30/2011 - 23:11 | Link to Comment Caviar Emptor
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 

Thu, 12/01/2011 - 00:19 | Link to Comment Teamtc321
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.   

Wed, 11/30/2011 - 23:18 | Link to Comment Everybodys All ...
Everybodys All American's picture

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

Wed, 11/30/2011 - 23:29 | Link to Comment Randall Cabot
Randall Cabot's picture

Confucius say: Contraction bullish, buy stocks!

http://finance.yahoo.com/q?s=%5ESSEC

Wed, 11/30/2011 - 23:36 | Link to Comment MFL8240
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!!

Wed, 11/30/2011 - 23:39 | Link to Comment RobotTrader
Wed, 11/30/2011 - 23:56 | Link to Comment SAME AS IT EVER WAS
SAME AS IT EVER WAS's picture

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

Thu, 12/01/2011 - 00:22 | Link to Comment Teamtc321
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. 

Wed, 11/30/2011 - 23:49 | Link to Comment SAME AS IT EVER WAS
SAME AS IT EVER WAS's picture

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

Thu, 12/01/2011 - 00:09 | Link to Comment LookingWithAmazement
LookingWithAmazement's picture

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

Thu, 12/01/2011 - 02:00 | Link to Comment Caviar Emptor
Caviar Emptor's picture

We don't need no stinkin' manufacturing!

Thu, 12/01/2011 - 02:21 | Link to Comment navy62802
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 ...

Thu, 12/01/2011 - 04:24 | Link to Comment Belarusian Bull
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.

Thu, 12/01/2011 - 08:28 | Link to Comment Element
Element's picture

But can they buy oil, coal, and uranium if they're broke, and currency nearly worthless? They can say its pegged to the dollar, and therefore dollar equivalent value, but what if people don't want it in exchange for raw materials? The only way full systemic collapse works for them is if commodity-currencies are in the toilet as well and industrial commodities crash spectacularly, and that should follow any second global trade collapse.

And they do have to deal with their people, they have warned and admitted recently that any economic collapse in China would lead to extreme outcomes that the rest of the world really should do everything possible to avoid. Beijing came right out and said that earlier this year, and used it as an excuse to not unpeg or raise the exhange rate.

Thu, 12/01/2011 - 08:12 | Link to Comment Element
Element's picture

Wow, I've been ignoring China for a few months, too many doom stories in 2010 and early 2011, and it all got old fast.

I shouldn't be surprised by this but I am.

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