Bankinter: Caixin Manufacturing PMI (December): 50.5 vs. 51.7 expected vs. 51.5 previous. The PMI breaks the two-month upward streak and falls more than expected. Fears of new tariffs on Chinese imports when Trump takes office on 20 January dampen purchasing executives’ expectations. The data is in line with the official Manufacturing PMI which was released three days ago with a reading of 50.1. Despite both slowing, President Xi Jinping recently insisted that China will grow 5% by 2024, in line with the target. This is good news, although the market gives him little credibility and remains doubtful about growth in 2025 and beyond. Our estimate is that it will decelerate to 4.5% in 2025e and 4.3% in 2026e. We insist on our recommendation not to take positions in China: it is facing a triple bubble of debt, real estate and stock market and for the moment it does not seem likely to introduce liberalising structural measures to unblock this situation. Following the data, the Chinese 10A bond fell 3bp to 1.64%, reaching a new all-time low, and the Chinese stock market fell 3.0% yesterday.
China’s Caixin manufacturing PMI breaks two-month upward streak and slips to 50.5 from 51.5
