By Rudi Filapek-Vandyck

No rumours preceded today's release of a surprisingly negative HSBC Flash China Manufacturing PMI which, at 48.0 in November, prints a 32-month low. Last month the index rose to 51.0. Note that an index reading below 50 suggests contraction in overall activity.

Equally negative was the Flash China Manufacturing Output Index which, at 46.7 from 51.4 in October, also printed a 32-month low.

HSBC reports all data used for the survey were collected between 11?21 November. The HSBC Flash China Manufacturing Purchasing Managers' Index is published typically about one week before final PMI data are released, making the HSBC PMI the earliest available indicator of manufacturing sector operating conditions in China. The estimate is typically based on approximately 85%?90% of total PMI survey responses each month and is designed to provide an accurate indication of the final PMI data.

Hongbin Qu, Chief Economist, China & Co-Head of Asian Economic Research at HSBC said in response to today's subdued release: "The dipping headline manufacturing PMI implies that IP growth is likely to slow further to 11-12% y-o-y in the coming months, as domestic demand cools and external demand is set to weaken despite the still resilient new export orders. That said, as inflation is likely to decelerate at a faster than expected pace, it will leave more room for Beijing to step up selective easing measures, which should gradually filter through to keep China on track for a soft-landing."