CLSA PMI Above 50 Again in May

Brokerage CLSA said its China Purchasing Managers' Index (PMI) rose in May to a 10-month high of 51.2 from 50.1 in April, which offered fresh evidence of recovery in the world's third-largest economy. This was the second month in a row that the index was greater than the static mark of 50 and gives greater evidence that the previous stimulus package and tax breaks quickly introduced by Chinese Central Government to support a range of sectors is taking effect.

"For the first time the PMI shows genuine evidence that policy really is gaining traction," said Eric Fishwick, head of economic research at CLSA. Although the export orders were still just below 50 on the sub-index, it was notable that overall new orders rose to 10 month highs.

The National Bureau of Statistics, issued by the Chinese Government, also showed the economy regaining its footing. The official PMI, released earlier on Monday, fell to 53.1 in May from 53.5 in April, its third straight month above 50.