2012-09-02

Chinese PMI falls below 50; 5 banks earn more than 272 Fortune 500 manufacturers

Chinese PMI hits 9-month low
The official purchasing managers index (PMI), dipped below the 50 mark – where a reading above 50 indicates growth – to 49.2 in August from 50.1 a month earlier.

Advance warning of manufacturing industry hollowing out, 5 bank's profits exceed 272 companies (报告预警制造业空心化 5银行利润超272家企业)

272 manufacturing firms account for 42% of revenue in the Fortune 500, but only 25% of profits. The 5 largest commercial banks earned 5% of operating income and more than 30% of net profits. These numbers have changed considerably over the past 5 years as manufacturing profits decline and bank profits steadily rose, and this had led to fears that the manufacturing industry is being hollowed out.

In some respects, the decline of the manufacturing sector is the natural result of economic development. In contrast, the rise of the banks is entirely a story of the 2008 global financial crisis and stimulus plan, executed through the banks. It is the banking sector that should scare economists, not the manufacturing sector.

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