Interpretation of China’s June Caixin Manufacturing PMI data - What data is used to measure the rise and fall of China’s economy?
Since we have paid more attention to economic data from the United States and other areas around the world, let’s also pay attention to our own economic data.
China's Caixin Manufacturing PMI for June, previous value 51.7, expected 51.2, published data 51.8
Data released by Caixin showed that China's manufacturing prosperity in June was higher than expected and the previous value.
The index is compiled by Caixin and British research company Markit Group Ltd. The survey data covers the manufacturing industry of small and medium-sized private enterprises. So far, the index has remained above 50 on the 0 axis (velvet pants line) for eight consecutive months. At least overall, the manufacturing industry has been thriving in the past eight months. And it is the highest value in the three-year cycle since 2021.
PMI shows the prosperity of the industrial manufacturing industry of an economy or country in the future, but what is the difference in weight between the PMIs released by China and the United States in the same period?
United States: An economy dominated by financial capital, with total GDP coming from the service industry, especially financial/government services. The United States is also the country with the most financial derivatives in the world, which means that the manufacturing PMI does not have a high weight in the US economy. Although the manufacturing index has an impact on the United States, it is not much.
China: An economy dominated by industrial capital, currently in the expansion stage after the accumulation of industrial capital, and gradually transforming to financial capital. However, it is still dominated by industrial capital, so manufacturing or industrial data has a high weight on the Chinese economy, accounting for 30% of China's GDP. At the same time, the related service industries brought by the manufacturing industry, together with the manufacturing industry, directly account for 50% or even more of China's GDP.
In particular, the calculation methods of GDP in China and the United States are different. The United States (mainly uses the expenditure method, supplemented by the income method, and supplemented by the production method), and China (mainly uses the production method, supplemented by expenditure and income)
Judging from the Caixin Manufacturing PMI in June and the data for eight consecutive months, is China's economy not doing well? At least the data does not show that. (Don't talk about data fraud. When it comes to data games, the United States is the king.)
China's Caixin Manufacturing PMI in June is based on data from non-governmental organizations. From the official data, we can see that official data is often slightly lower than unofficial data. Among them, the PMI of high-tech manufacturing has reached 52.3, which has reached a high level of development, and the PMI of equipment manufacturing is 51.
Equipment manufacturing is a barometer of the manufacturing industry. Equipment can only be produced if the expectations are good, and the equipment manufacturing index can rise if equipment is produced frequently. Industrial added value increased by 5.6%, service industry production and total retail sales of consumer goods increased, and the most important thing was the increase in fixed asset investment, while real estate investment in fixed asset investment decreased. Investment in high-tech manufacturing and high-tech service industries increased significantly, and the overall data increased, indicating a good economic performance.
In fact, strictly speaking, except for real estate, the Internet and finance, other industries have not seen a decline in the industrial chain. But why do foreign media always sing the praises of China, and why do experts and public intellectuals in certain fields in China feel so sad?
The core is real estate, and the Internet and financial industries have the loudest "voices" in the media field. Although in the trend of history, in the process of industrial capital accumulation and expansion, real estate, the Internet and even finance have ushered in the dividends of the times, thereby allowing a large number of people to increase their wealth dramatically, this does not necessarily mean that China, except for these three sectors, is an economy in recession.
Going back to what I mentioned at the beginning of the article, China and the United States are very different economically. China is still in the stage of industrial capital accumulation and expansion, so the data on industrial capital can be used to judge China's economic rise and fall. On the other hand, financial data, real estate and the Internet are the basis for interpreting data in a financial capital economy like the United States.
It is obviously inappropriate to use financial technology data to judge the economy of a country with industrial manufacturing as its theme. Moreover, industrial capital still accounts for 30% of the country's economic entities and covers 30% of the employed population. At the same time, the extended service industry and other fields basically account for more than half of the data of the economic entities.
Therefore, although China has gradually prepared to transform towards financial capital and global competition in financial capital, the overall economy is still supported by industrial capital. Therefore, when looking at China's economy, we cannot only look at the data from sectors such as finance, real estate, and the Internet.
