February 24, 2014

China's Economic Bubble Is Bursting

By Chriss Street
The highly credible HSBC/Markit Purchasing Managers' Index (PMI) of economic demand in China reported that demand in China's factories fell for a second month in a row and hit a seven-month low. Markit Research also reported that production turned negative for the first time in seven months and hiring expectations fell to a new five-year low. Although the Chinese government continues to produce an array of rosy economic statistics each month, China's industrial competitiveness is fading fast. Coupling the production contraction with banking problems and a fall in the HSBC/Markit Employment Index to a five-year low, it appears that China's economic bubble is bursting. Markit Research compiles "flash" indicators each month for demand and operating conditions in China's manufacturing sector. The report is based on surveys responses from executives inside approximately 85%-90% of China's most important factories. A Markit flash score above 50 means that activity is expanding and a score...(Read Full Article)