China policy promotes spirit
The September PMI data followed the latest pledge of Beijing to increase the economy. According to CN Wire, China’s NDRC allegedly planned to be responsible for continuing macro policies and changing economic conditions. Beijing will also present further consumer subsidy to promote demand among other measures.
Monday’s announcement takes place at an important time, in which China’s Golden Week holiday begins on Wednesday, October 1.
American tariffs affect margins and broad economy
Recent labor markets and consumer expenditure data has expressed concern about the demand. Retail sales rose 3.4% year-on-year in August, below 3.7% in July and 6.4% in March. For perspective, Chinese retail sales historically have an average of 12.09%.
The American tariff has affected external demand, causing value pressure. The firms have reduced staffing levels to limit the impact of margin squeeze, weigh consumer spirit and curb personal consumption. China’s unemployment rate rose from 5.2% in July to 5.3% in August, while young unemployment increased by 18.9%, 17.8% in July and 14.5% in June.
September PMI data can provide Beijing with little relief, in which the benefits of the manufacturing sector can be combined with benefits. In August, industrial profits declined by 1.5% in July by 20.4% year-on-year. In particular, August manufacturing PMI revealed that average sales prices had risen. The September PMI data shows a fresh margin pressure.
Market reaction to services PMI
Financial markets initially responded positively to the PMI release, although the benefits were short -lived as margin concerns were revived.
The Hang Seng index briefly reached a high of 26,712 after 26,712 after 26,712.
On Tuesday, September 30, the index for the morning season from 0.52% to 26,761.
