Hong Hao: Caixin China Manufacturing PMI Doesn’t Actually Disappoint

Today’s Caixin China manufacturing PMI has disappointed because of strong official PMI data last week. Meanwhile, at the Boao Forum for Asia, Premier Li Qiang mentioned that the Chinese economy continued to improve in March.

So where is the disconnect?

The official PMI is tilted toward larger state-owned enterprises (SOEs), while the Caixin PMI is more focused on the export sector and small and midsize enterprises (SMEs). Apparently, the SMEs are still struggling to find their footings while the SOEs are recovering with policy assistance. This may help explain why the authority is calling for more support for the private sector and SMEs.