China Caixin PMI Services dropped to 52.5 in December, down from 53.5, missed expectation of 53.2. PMI Composite fell fro a 21-month high of 53.2 to 52.6. Markit said December saw softer, but still strong, rise in business activity. Total new work continued to rise solidly. Output charges rose in manufacturing sector, but fell at services companies.

Commenting on the China General Services PMI™ data, Dr. Zhengsheng Zhong, Director of Macroeconomic Analysis at CEBM Group said: “The Caixin China Composite Output Index dropped to 52.6 in December from 53.2 in the previous month. Rates of expansion in both the services and manufacturing sectors moderated. However, China’s overall economy continued to stabilize. The gauges for new orders, employment and output prices all remained in positive territory despite modest drops. It is difficult for the measure of business confidence, which remained at a relatively low level in December, to improve. That has become a major hurdle to stabilizing the economy. Looking forward, the phase one trade deal between China and the U.S. should be able to help corporate sentiment recover. China’s economy is likely to get off to a quick start in 2020, but it will still be constrained by limited demand for the rest of the year.”

Full release here.

China Caixin PMI Manufacturing rose to 49.9 in July, up from 49.4 and beat expectation of 49.6. Markit noted that production stabilized amid slight uptick in new work. However, employment fell at the quickest pace for give months. Also, factory gate prices declined for the first time since January.

Commenting on the China General Manufacturing PMI™ data, Dr. Zhengsheng Zhong, Director of Macroeconomic Analysis at CEBM Group said:

“The Caixin China General Manufacturing PMI rose to 49.9 in July, although it remained in contractionary territory.

“The subindices for new orders and output both returned to expansionary territory, and the gauge for new export orders rose slightly, though it remained in contractionary territory. This indicates that domestic demand recovered, and overseas demand was stable. The subindex for employment dipped further into negative territory, suggesting that the labor market didn’t improve.

“While the subindex for stocks of purchased items fell into contractionary territory, the measure for stocks of finished goods dropped further into decline, reflecting that increased orders consumed inventories to some extent. The measure for future output jumped in July, pointing to an increase in confidence among businesses. The gauge for output charges dropped into negative territory, while that for input costs remained in positive territory despite a mild fall. This was a sign of downward pressure on the profitability of downstream companies.

“China’s manufacturing economy showed signs of recovery in July. Business confidence rebounded, reflecting the strong resilience in the economy. Policies such as tax and fee reductions designed to underpin the economy had an effect. The situation may strengthen policymakers’ insistence to regulate the property market and the finance industry.”

Full release here.