China Suspended PMI Details Over Accuracy Concerns, Bureau Says

China Suspended PMI Details Over Accuracy Concerns, Bureau Says

By Bloomberg News  Aug 26, 2013

China suspended the release of industry-specific data from a purchasing managers’ index for manufacturing because of accuracy concerns, the National Bureau of Statistics said.

“We can’t ensure all industry-specific data can reach accuracy requirements,” Sheng Laiyun, a statistics agency official, said at a briefing in Beijing today. “Samples in some industries are very small, and accidental changes may affect overall data quality — we were concerned that some of the numbers may affect related investors and users.”The statistics bureau and the China Federation of Logistics & Purchasing suspended the release of some industry-specific PMI data to subscribers, starting with the June numbers published in July. That halt underscored concerns over China’s economic statistics, from exports inflated by false invoicing to a national unemployment rate that excludes the nation’s millions of migrant workers.

“I don’t buy NBS’s explanation — industry-specific data has been there for years and proved very useful in reading the Chinese economy,” said Xu Gao, chief economist with China Everbright Securities in Beijing, who previously worked for the World Bank. “Without these specific data, the credibility of China’s headline official PMI indicator is undermined,” Xu said, adding his firm has subscribed to the data for more than three years.

Cai Jin, vice president of the CFLP, which compiles the data with the NBS, said previously that publication of some data had been suspended because of limited time to analyze the large volume of responses.

Bigger Sample

The logistics federation increased the number of companies in its manufacturing survey to 3,000 from 820 starting with January’s reading and also regrouped the industries into 21 categories from 31. The latest release referred to 31 industry groups.

China’s official PMI rose to 50.3 in July from 50.1 in June as Chinese Premier Li Keqiang rolled out policies to arrest an economic slowdown.

“It’s true that industry-specific PMI can be very volatile,” said Xu Xiangchun, a steel researcher and chief analyst at Mysteel.com, in Beijing. Xu said that while July numbers for a steel industry PMI were released after being suspended the previous month, numbers for other industries weren’t disclosed.

To contact Bloomberg News staff for this story: Xin Zhou in Beijing at xzhou68@bloomberg.net

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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