China manufacturing rebounds in June: HSBC

Is the recovery sustainable?

The HSBC Flash China Manufacturing PMI reading rebounded to a year to date high of 50.8 in June, which came in much stronger than consensus expectations of 49.7 and is the highest reading since November 2013.

According to HSBC, the improvement was broad-based with both domestic orders and external demand sub-indices in expansionary territory. Inventory reduction quickened.

“This month's improvement is consistent with data suggesting that the authorities' mini-stimulus are filtering through to the real economy. Over the next few months, infrastructure investments and related sectors will continue to support the recovery. We expect policy makers to continue their current path of accommodative policy stance until the recovery is sustained,” noted the report.