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The Sales Managers Index: China

Released: February 21, 2017

Growing Consumer Sales Underpin China’s Growth

  • Consumer services sales growth at 21 month high in February
  • Manufacturers expressing renewed optimism
  • Chinese Yuan remains undervalued by 24% as prices charged slow

Sales Managers’ Index (SMI) data shows that the Chinese economy continued to grow in February, at a faster rate than in January. The service sector (55.4) is continuing to outpace manufacturing (52.6) as it leads private sector growth in new sales terms. The Headline SMI (51.8) for China, which measures the overall state of the economy reflected increased levels of growth in the month, confirmed by the improving levels of Sales and Market Growth sub-indexes. The Prices Charged Index (51.1) continues to reflect price pressures over the past year with the manufacturing sector reporting the largest price increases, moreover, February data suggests that price inflation is showing no signs of slowing. Business confidence has grown from a low in September of 50.7 to register 51.0 in February. This level is low by the historical standards of the boom years but improving sentiment is being vindicated by solid sales and market growth. The jobs market appears stable with little change reported month-on-month. The Chinese Yuan remains very significantly undervalued compared with the U.S. Dollar registering -24% on the World Price Index (WPI) scale (see below) in February signifying that Chinese exports remain very competitive.

Headline Sales Managers' Index

   Prices Charged Index

Sales Managers' Index Trends

Direction Speed
SMI Growing Slowly
Business Confidence Growing Slowly
Market Growth Growing Slowly
Sales Output Growing Faster
Prices Charged Growing Slowly
Staffing Levels Growing Very slowly
Profit Margins Declinig  Very slowly

Market Growth Index

Over the longer term the SMI suggests a slightly bigger fall in the rate of growth of GDP than reported by official Chinese statistics. It is clear from China's mid-level position in the recently updated Data Quality Index that Chinese official data must be viewed with some caution, based on its out-of-date System of National Accounts (SNA) version of 1993 as set out by the United Nations. We believe it is likely that the SMI provides a more realistic picture of current growth of approximately 5% as opposed to the official 6.5 %+. Despite the generally accepted slowdown in the rate of growth over the past 3 years, it is clear that China is moving from being a predominantly manufacturing / investment led, to a more consumer / services based economy, and that the new growth driver of activity is the services sector.


World Price Index under/overvaluation February 2017

About China SMI Data

The Sales Managers' Index provide the earliest monthly data on the speed and direction of The China's economic activity.

Key advantages of China SMI:
  • The SMI provides the first indication each month of the speed and direction of economic growth in China .
  • The SMI provides the most complete indication of growth, covering all private sector activity.
  • The SMI is based on a key occupational group - uniquely able to sense changes in business activity levels.
  • The SMI is composite index of business confidence, market growth, sales, prices charged and staffing levels.
  • The SMI is a diffusion index, any index value above 50 indicates growth and below 50 indicates contraction.
About the Sales Managers’ Indexes
About the Sales Managers’ Indexes
About the Sales Managers’ Indexes
About the Sales Managers’ Indexes
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