China macro/China PMI’s

China PMI Manufacturing is out. A modest uptick, to 51.8, from 51.7, but clearly a healthier trajectory than a) what we are seeing locally, with Aussie PMI’s and b) relative to the Federation of Logistics data.

Not much to make from it, China’s key issues remain property and infrastructure bubbles bursting, and the seeming lack of desire to raise household share of income (as a % of GDP).

They could do that by lowering taxes, or, increasing government expenditure on things like healthcare, education, childcare, social security, aged care, unemployment benefits and the like. The other one is selling down state owned assets to the private sector, as a means of transferring the sources (means of generating) income.

All of that would help lift China’s share of consumption, which is very low, and lower investment, which is very high.

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