Forbes: “The “imminent” demise of China will have to be postponed…again.
The risk to third quarter growth forecasts in the market are now to the upside.
On Thursday, HSBC’s China Flash PMI data showed a sharp rebound to 50.1 in August from 47.7 in July. Consensus estimates had it rising slightly to 48.2. Today’s manufacturing data is consistent with headline activity indicators such as industrial production, which also recovered in July. It confirms that the economy has stabilized in the short term at least and downside risks seen in the second half of the year have subsided.
Perhaps the best piece of news out of the PMI numbers is that it was driven by domestic demand. New export orders dropped to 46.5 from 47.7 in July, while total new orders rose sharply to 50.5 from 46.6.
Based on this flash PMI, we now see upside risks to our third quarter GDP forecast,” said Nomura Securities senior economist Zhiwei Zhang in Hong Kong. His forecast is for 7.4% growth, declining from the first (7.7%) and second quarters (7.5%).
For the last three years, the Chinese government has been trumpeting its stated goal to move away from its old export-driven export model. China is turning inward. That will come with growing pains as it transitions from a low-cost producer to one that produces value-added, even high end goods made by workers earning middle class incomes who then buy new apartments, cars, refrigerators, and — of course — take trips to south China for Disney and Macao casinos.”
http://www.forbes.com/sites/kenrapoza/2013/08/22/why-china-is-better-than-you-think/
CHINDIA ALERT: You'll be living in their world, very soon 