China Caixin PMI Shrinks at Second-Steepest Pace on Record

    Photo: CNN Business

    The Facts

    • According to a private survey, China's services sector - which accounts for more than half of the nation's GDP and over 40% of its employment - saw activity shrink at the second-steepest pace on record in April.

    • Caixin Media Co. and research company IHS Markit reported that the Caixin Purchasing Managers' Index (PMI) fell from 42 in Mar. to 36.2 last month, well below the 50 mark that indicates economic contraction.

    The Spin

    Anti-China narrative

    Rather than learning to live with the virus, China continues with its dynamic zero-COVID policies by enforcing lockdowns that are hurting the country's competitiveness as a global manufacturing center. This makes the PRC a less attractive place to invest in and is damaging to its economy.

    Pro-China narrative

    China is facing its worst COVID outbreak since early 2020 and is right to use the same strategies that worked before. While there are concerns over how long it will take to contain the virus and return to normal business conditions, cases are already falling and the month of May should see the economy on the mend.

    Narrative C

    China's latest COVID lockdown has produced a domino effect that may pose a risk to US manufacturing, which is inextricably linked to China's. Despite this risk, the US economy remains strong and will continue to recover.

    Nerd narrative

    There is an 80% chance that Chinese GDP will grow from Q2 to Q4, according to the Metaculus prediction community.

    Establishment split



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