In August this year, the China HSBC Flash Manufacturing Purchasing Managers Index (PMI) decreased to 50.3, the lowest level of the past three months, down from July's final reading of 51.7, as announced by the HSBC on August 21. In particular, in August the index for production declined to 51.3 from July's final reading of 52.8, falling to the lowest level of the past three months.
Hongbin Qu, the HSBC's chief economist for China, said that sluggish demand has contributed to the decrease in production, with both domestic and external new orders rising at slower rates in August compared to the previous month. Meanwhile, inventory consumption has been moving slowly. He added that both monetary and fiscal policy should remain accommodative until there is a more sustained rebound in economic activity.
