Meanwhile, In China

Reasonably upbeat PMIs out of China were wholly insufficient to allay market concerns on Tuesday, even as a better-than-expected read on the official factory gauge suggested the world’s second largest economy is stabilizing amid a laundry list of gale-force headwinds.

The official manufacturing PMI for November printed 50.1, back in expansion territory for the first time since August (figure below).

The non-manufacturing gauge, meanwhile, beat handily at 52.3. Economists expected 51.5.

This sounds a bit dry, but it’s crucial at the current juncture. The Chinese economy is caught between a power crunch, a regulatory crackdown and a property meltdown, all of which are, to a certain extent anyway, self-inflicted.

Any good news is welcome, even when it comes courtesy of data that no one really believes is accurate.

Notably, Tuesday’s figures showed factory input prices declined to 52.9 from 72.1, and a gauge of output prices fell all the way to 48.9 from 61.1. The NBS attributed that to policy measures. As a reminder, factory gate inflation in China is running at the hottest in 26 years (figure below).

New export orders remained in contraction territory, as did new orders more generally.

In any case, it scarcely mattered Tuesday. Sentiment is poor. There are pressing questions around how Beijing will cope with another highly-transmissible variant given China’s “zero COVID” policy. And sundry regulatory and deleveraging campaigns continue to cast a long shadow.

The Hang Seng China Enterprises Index dropped 1.6% Tuesday to the lowest since mid-2016 (figure below).

Shares of China Gas plunged 20% in a rather stark reminder that engineering a slump in the property sector has consequences.

The decline in the gas distributor’s shares was the largest in decades, and erased some $2.5 billion in market cap (figure below).

Net income dove 19% in the six months through September thanks to a huge drop in new residential connections.

The 22% decline in Hong Kong-listed Chinese shares makes the Hang Seng China Enterprises Index the worst-performing major on the planet for 2021.