China's Growth Acceleration Is Reaching Its End

China plenumREUTERS/Kim Kyung-HoonA paramilitary policeman standing guard is silhouetted on a large screen showing propaganda slogans on Tiananmen square next to the Great Hall of the People, where the closing ceremony of the Chinese Communist Party plenum is going to be held on Tuesday, in Beijing, November 11, 2013.

In recent months, China has quashed fears that the economy was slowing and heading for a hard landing.

However, China’s November HSBC manufacturing flash PMI reminds us that the country’s growth outlook remains uncertain.

The headline PMI fell to a two-month low of 50.4 from 50.9 in October. Economists were looking for a reading of 50.8. This was the first decline in five months.

“The optimism unleashed by China’s reform plan is today hammered by the reality of weaker economic data,” said Societe Generale economist Wei Yao.

“Although the headline figure of 50.4 still indicated expansion, we caution that the acceleration trend of activity growth is reaching its end,” added Yao.

The final HSBC PMI as well as the official PMI comes at the end of this month.

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