Many analysts had expected the August reading to stabilize, or even edge up slightly. Yao Wei, a China economist at Société Générale in Hong Kong, described the result as “just awful” in a research note.I have no idea what made them think the number would go up. The government has signaled repeatedly that they will not stimulate enough to cause more bubbling in the economy. We're still in bubble stage now, so there is only softening the landing.
New export orders, which are also captured in the monthly survey, sagged sharply as the crisis in Europe ate into export demand, indicating that Chinese exports are likely to languish for some time. Exports edged up just 1 percent in July compared to a year earlier, official data released earlier this month showed. Further cause for concern, Mr. Qu noted, was that domestic demand, also failed to show a meaningful improvement in August.