Purchasing managers wearing gloomy looks

Business | Agencies and Eurus Yiu 6 Aug 2020

Mainland and Hong Kong business sentiment dampened in July as shown by purchasing managers indexes.

Growth in the mainland's services sector slowed in July from a decade high the previous month, with the Caixin/Markit services Purchasing Managers' Index falling to 54.1 from June's 58.4.

And private business sentiment in Hong Kong continued to weaken with the IHS Markit Purchasing Managers' Index sliding 5.1 points to 44.5 in July.

China is estimated to face a 3.5 trillion yuan (HK$3.9 trillion) liquidity gap in August with the maturity of some government bonds, and the People's Bank of China is expected to provide a new round of government stimulus bonds worth more than 1.1 trillion yuan this month.

Despite the pessimism, the yuan soared 300 points yesterday on the news of a video conference on trade between senior Chinese and American officials on August 15.

Vice Premier Liu He and US Trade Representative Robert Lighthizer, the principal negotiators for the two countries, will participate in the conference, which will serve as an initial six-month review of the phase 1 trade pact activated on February 15. Besides reviewing the implementation of the trade deal they will likely air mutual grievances in an increasingly tense relationship during the session, planners said.

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