China Manufacturing PMI

China's official manufacturing PMI is published by the National Bureau of Statistics together with the China Federation of Logistics and Purchasing. It is based on a survey of about three thousand manufacturers, weighted toward large and state-owned enterprises, and it follows the standard diffusion-index method: readings above 50 indicate that more firms reported expansion than contraction across production, new orders, raw-material inventories, employment and supplier delivery times.

It is released on the last day of the reference month, earlier than virtually any other hard or soft data for the Chinese economy, so it serves as the first signal of how industrial activity is evolving. Because China is the largest consumer of many industrial commodities, the index has historically tended to be felt in copper, iron-ore-linked currencies and the Australian and New Zealand dollars as much as in Chinese assets. Hong Kong and mainland equity indices, and the offshore yuan, often react in the Asian session.

The seasonal pattern around the Lunar New Year, which shifts between January and February, makes early-year readings hard to interpret; many analysts combine the two months. The sub-indices on new export orders and prices offer insight into external demand and producer inflation. Like any diffusion index, it signals direction rather than magnitude.

A non-manufacturing PMI covering services and construction comes out simultaneously. A private manufacturing survey, compiled by S&P Global and sponsored by a Chinese financial firm, follows a day or so later and samples more smaller, export-oriented companies, so the two sometimes diverge.