Hao HONG 洪灝, CFA (@HAOHONG_CFA) “How to explain the discrepancy between China’s expanding PMI and slowing Industr” — TopicDigg
Hao HONG 洪灝, CFA
@HAOHONG_CFA
Person of the Year-Bloomberg BW;3xChina’s Most Influential Economist;3xEconomist of the Year-Asia Private Banker;“The man called China’s boom & bust”-Bloomberg
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How to explain the discrepancy between China’s expanding PMI and slowing Industrial Value Added?
It’s possible that rising input costs, evident by surging commodities and PPI, are recognized earlier by accounting rules while revenue recognition is slower. The same reason as PPI often leads CPI.
It is also possible that rising prices start to curb demand. But we won't know for sure till a few more data points later.
I won't accept the explanation from the analyst community that last year’s base was too high. This higher base effect should have been factored into this year’s forecast.
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