Because economic indicators in a dictatorship are possible to fudge; you can't take this completely at face value. However, if China does manage to gradually cool their overheated economy without a crash, it will be good news for the world economy; a it will take some of the pressure off world oil prices without drastically upsetting the various trade protocols and agreements. Of course, its an IF.
BEIJING (Reuters) - A pair of reports on Chinese manufacturing issued Monday reinforced views that the country's economy is gradually cooling.
Hong Kong-based brokerage CLSA said its purchasing managers' index for China rose to 51.5 in July from 51.0 in June.
The increase, the first in four months, signaled a slightly stronger rate of improvement in China's manufacturing sector, but it was still the third-weakest reading since the index was launched in April 2004.
An index based on a separate survey of purchasing managers conducted for the National Bureau of Statistics painted a less rosy picture. The index fell for the fourth straight month in July, to 51.1 from 51.7 in June.
However, both indexes remained above the 50 mark, indicating manufacturing expansion; a reading below 50 shows contraction.
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