China Manufacturing PMI Drops Back Into Triple-Dip Contraction, Lowest In 7 Months

Perhaps the collapse in oil prices does have something to do with demand after all? HSBC's China's Manufacturing PMI tumbled to 49.5 (missing expectations of 49.8), its lowest since May (and first contraction). This is the 3rd contractionary print in the last 2 years as HSBC notes "domestic demand slowed considerably," with only new export orders (to whom we wonder) improving. Employment slipped yet again as did output leaving HSBC no choice but to demand "further monetary easing," due to "rising disinflationary pressures, which fundamentally reflect weak demand."

Triple-dip contraction in soft-survey data...

 

as across the board the PMI components were weak... apart from new export orders?? To who?

 

Of course - you know what HSBC thinks this should mean:

Commenting on the Flash China Manufacturing PMI survey, Hongbin Qu, Chief Economist, China & CoHead of Asian Economic Research at HSBC said: “The HSBC China Manufacturing PMI dropped to a seven-month low of 49.5 in the flash reading for December, down from 50.0 in November. Domestic demand slowed considerably and fell below 50 for the first time since April 2014. Price indices also fell sharply. The manufacturing slowdown continues in December and points to a weak ending for 2014. The rising disinflationary pressures, which fundamentally reflect weak demand, warrant further monetary easing in the coming months.”

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