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Chinese Economic Data in Focus after Dismal Auto Sales and PMI

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Chinese economic data

Tomorrow, China is expected to release a slew of economic data including fixed asset investment, industrial production, real estate indicators, and retail sales. So far, China’s February economic data has been far from satisfactory. The country’s auto sales fell 13.8% YoY in February, making it the eighth consecutive month of decline. Last year, Chinese car sales fell YoY for the first time in almost two decades. Falling car sales in China, the world’s biggest automotive market, is negative for US automakers like Ford (F) and General Motors (GM), which have a sizeable presence in the country.

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Auto sales data

Prior to the dismal auto sales data, China’s manufacturing PMI also showed a contraction. The Caixin/Markit February manufacturing PMI came in at 49.9, while the official survey showed a reading of 49.2. The Caixin/Markit survey is based on a survey of small and medium private companies, while the official survey is predominately based on large state-owned enterprises. Nonetheless, both the readings were lower than 50, which shows a contraction in manufacturing activity.

Trade spat

China’s economic data has received even greater scrutiny over the last few months as markets try to gauge the extent of its economic slowdown. So far, Chinese stocks including Alibaba (BABA), NIO (NIO), JD.com (JD), and Tencent (TCEHY) have shown strength. Last year, Chinese stocks (FXI) (BIDU) underperformed global markets amid concerns over its economic slowdown and trade spat with the United States.

China’s February trade data was also much worse than expected. Read China’s February Trade Data Compounded Slowdown Fears for more information.

You can also check China’s Slowdown: Analyzing the Knowns and Unknowns for more analysis of China’s economic condition.

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