CHINA'S MANUFACTURING SECTOR DECELERATES

Business Insider

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empty idle chinese steel factory manufacturing

REUTERS/David Gray

China's National Bureau of Statistics will release its June manufacturing PMI report. The headline number crossed Bloomberg at 8:59 p.m. ET.

The headline number fell to 50.1 from 50.8 in May.

This was right in line with expectations.

Any reading below 50 signals contraction, so this deteriorating number reflects just marginal expansion.

China is the world's second largest economy and one of the remaining engines of global growth.

Here is a breakdown of the last two month's PMI reports:

    June 2013  
 May 2013 
PMI                           50.1 50.8
Output 52.0 53.3
New orders 50.4 51.8
New export orders na 49.4
Backlog of work na 44.9
Inventories of finished goods   na 48.6
Purchases quantity na 51.5
Imports na 50.3
Input prices 44.6 45.1
Inventories of raw materials 47.4 47.6
Employment 48.7 48.8

Supplier delivery times   

Business Activity Expectation

50.3

54.1

50.8

56.3

Earlier today, we learned that South Korean exports unexpectedly contracted in June. Korea is facing its own challenges, especially as its currency strengthens substantially against the Japanese yen. Still, its exports are hugely exposed to mainland Asia, and is therefore sensitive to demand out of China.

All of this comes as interest rates rise in China, signaling financial stress.  For the most part, China and its central bank has been standing by quietly.



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