Some economist see reason for optimism in an officially-backed survey released here today. The purchasing managers’ index (PMI) is a measure of orders and output expectations from officers of Chinese companies. The latest number was still in negative territory, indicating that a continued slowdown is likely. But it was higher than last month and some economists’ expectations, offering a measure of hope that the worst could be over.
Mingchun Sun, an economist with Nomura Securities in Hong Kong, writes that while “there is still a risk that continued fall-off in global demand may further undermine China’s growth,” the latest PMI number supports the idea that growth in the first quarter of 2009 will be higher than the end of 2008, when the economy expanded by just 6.8%, the lowest rate since 2001. Sun believes China’s $586 billion stimulus package should help the country achieve its target of 8% growth for the year.
There are dissenters, of course. My colleague Michael Schuman in Hong Kong recently spoke with Jim Walker, who famously predicted the 1997 Asian financial crisis. Michael writes that Walker has a gloomy outlook this year:
China won’t see GDP rise more than 4% in 2009, he says, and the country’s economy may not grow at all. “There is going to be precious little growth anywhere,” Walker says.