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Recession Hits China

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    The Chinese industrial sector Purchasing Managers' Index (PMI), measuring factory orders, has slid to a five-month low, falling below the 50 mark, the National Bureau of Statistics of China said Monday.

    BEIJING (Sputnik) — China's industrial PMI performed below expectations and fell to 49.9 in July from the June level of 50, which is the watershed between growth and contraction, according to the statistics bureau.

    A US 100-dollar banknote with a portrait of Benjamin Franklin and Chinese 100-yuan banknotes with portrait of late Chinese Chairman Mao Zedong are seen in the picture illustration in Beijing, China

    July figures are the lowest result since February. The index, which measures private sector company variables such as output, new orders, prices and employment, fell from 49.4 to 49.0 between January and February before rebounding. In January, the index reached its lowest point since August 2012 after sliding from December's 49.7.
    In contrast, the country's services PMI jumped from 53.7 to 53.9 between June and July.

    China's economy has recently been experienced significant turmoil, with growth rates at record lows, an increasingly volatile stock market and the yuan sliding against other currencies. In January, China reported its 2015 GDP increase to be the lowest in over 20 years.

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    Don't believe the hype about the Chinese

    A recession is, AFAIK, defined to be two consecutive quarters of negative GDP growth. China is still seeing around 6.5% annual GDP growth which, by the way, is something most countries could only dream of. China's record low growth rate is still much, much, much better than old, impotent Europe can muster.

    Chine is moving away from manufacturing, and more towards the information and services sectors. It wants to avoid falling into the middle-income trap, and so far everything is going to plan, according to official statistics.

    I wouldn't actually completely trust official statistics, but China's economy is certainly still growing, and not in recession.
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