End of the China bull?

BEIJING, Feb 3, 2008 (Xinhua via COMTEX) — Heads of China’s export-oriented manufacturing companies are feeling the pinch of the spreading US subprime crisis, the downward adjustments of export rebates, and the increasingly stronger Renminbi.

The January Procurement Manager Index (PMI) published on Feb. 2 by China Federation of Logistics and Purchasing (CFLP) stands at 53.0 percent, 2.3 percentage points lower than previous month. And among all sub-indices, the one for export orders for the first time over the past three years decreased.

Manufacturing PMI comprises a basket of sub-indices. It indicates an expansionary economy if the reading is above 50 percent, and a recession if below.

All the sub-indices except the one on inventory, which saw slightly rise in January, are all lower by varied degrees than the December 2007 ones, with the largest drops recorded in the indices on production, new orders and new export orders, whose decreases respectively reaching 3.4, 4.4 and 5.3 percentage points.

Notice should be given to the fact that the index on new export orders fell below 50 percent for the first time since January 2005.

Also according to CFLP, sectors as electronics, nonferrous refining, chemicals, fiber and plastics, textile and non-metallics, among the 20 sectors categorized under manufacturing industry, all registered PMIs lower than 50 percent.