In May this year, the China HSBC Flash Manufacturing Purchasing Managers Index (PMI) increased to 49.7, the highest level of the past five months, up from April's final reading of 48.1, as announced by the HSBC on May 22. In particular, in May the index for new export orders rose to 52.7, back above 50 again and reaching its highest level since November 2010.
Meanwhile, the production index, the overall index for new orders and the production price index exceeded 50, while the inventory index has declined, indicating that the manufacturing industry in China has recorded an improvement.
Hongbin Qu, the HSBC's chief economist for China, said that the rise in the PMI shows that China's economy has stabilized, which indicates that government measures such as lowering the costs of financing, aimed at ensuring steady growth, have had an impact. However, further observation is needed to observe the sustainability of the improvement in overseas demand. In addition, currently China's real estate industry faces risks of decreases in transaction prices, which means that the Chinese government's measures to maintain steady growth will need to continue.