Nomura notes that "China's Emerging...........>

CHINA: Nomura notes that "China's Emerging Industries PMI (EPMI), which gauges

sequential growth momentum in the country's high-tech industries, accounting for

~15% of GDP, is correlated with the official manufacturing PMI. It rose by 1.9pp

to 55.9 in May from 54.0 in April, as the recovery in high-tech industries gains

some momentum. Notably, the new export orders sub-index remained low at 32.6 in

May, unchanged from April, suggesting another month of sequential deterioration

in new export orders, in line with our view of collapsing external demand due to

the global pandemic. That said, we caution that the survey may not fully capture

new firms that are actively involved in the production and exports of antivirus

medical supplies. The EPMI is not seasonally adjusted, its May print of 55.9 was

above its 2015-2019 May average of 55.3. Adjusting for seasonality and factoring

in slumping external demand, we expect the official manufacturing PMI could

slightly rise to 51.0 in May from 50.8 in April."