MNI POLICY: Caixin China PMI Surges Near 10-Yr High as Demand Gains

The Caixin China PMI for July rose 1.6 points to 52.8, the highest point since 2011, with strong performances in terms of output and new orders amid firmer customer demand, according to publisher Caixin in an email announcement.

The higher PMI was mainly supported by a steeper increase in production across Chinese manufacturers. Output expanded for the fifth month in a row, while new orders expanded for the second month, with both increasing at the fastest pace since January 2011.

Increased production led to the strongest rise in purchasing activity since January 2013. New business also expanded at a solid pace which was the steepest since the start of 2011.

Caixin's unofficial PMI, which tracks small and medium-sized manufacturers, compares with the official PMI that came out on July 31 and increased 0.2 to 51.1 in July from June.

Overseas demand remained weak, with the gauge for new export orders remaining in contractionary territory for the seventh month, although contracting at the slowest pace in six months, Wang Zhe, Senior Economist at Caixin Insight Group, said in the email.

Firms remain cautious about hiring, with staff numbers falling modestly despite an increase in backlogs of work. The sub-index for employment stayed in negative territory for the seventh consecutive month, Caixin said.