China's Economy Is Floating on Hope

The latest PMI report (2015年3月中国制造业采购经理指数为50.1%) gave a reading of 50.1, barely positive. The breakdown was as follows:

The bottom right-most column is business expectations. At 61.3, manufacturers are the most optimistic they've been since exactly one year ago. Expectations are also the main shift in the PMI number, with other data points near the lows of the past three months.

Aside from the hope in the manufacturing sector, there is hope in the real estate sector that's been boosted by recent government policies. Hope is also strong in the stock market. In contrast, economic data is still negative.

Initial impact in the real estate sector is encouraging, at least one research firm covering 30 cities reports sales rose 70% in March from February.

Superimposed effect of the policy for the property market has brought good news. March 2015, E-House Real Estate Institute of monitoring of 30 typical city new commercial housing turnover area of ​​14.39 million square meters, growth of 71.2% mom, an increase of 8.3% yoy.

The question is whether the uptick holds, or whether this is again a cannibalization of future demand as marginal buyers jump into the market.

Recall last year, Hangzhou ended buying restrictions in July and the result was You Can See Why Developers Are Optimistic: 2000 Panic Buyers. Before August was finished, however: Hangzhou Housing Rebound Fades

iFeng: 政策叠加成效初显 30城成交面积环比增七成