HSBC will no longer provide one of the best gauges of China’s economy

Watching over China’s factories.
Watching over China’s factories.
Image: Reuters staff
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HSBC will no longer sponsor the Flash Markit Purchasing Managers Index, or “flash PMI,” survey for China and other emerging markets, one of the most-watched and most-valued economic indicators from China.

The flash PMI comes out before China’s official PMI data, and is based on an independent survey sent to executives at 420 different manufacturing companies in China.

The HSBC-sponsored survey and China’s official PMI have diverged substantially at certain points in recent years, with the Markit results almost always lower than China’s official figures. The closely-watched flash PMI figure is one of the few economic indicators in China that does not come directly from the government. Beijing is often accused of managing official indicators to make the economy look stronger than it is.

“We can confirm we are exiting the global PMI sponsorship,” Gareth Hewett, HSBC spokesman, told Quartz. “Sponsoring the PMIs has been a successful five year project.” HSBC will no longer sponsor of the survey in 22 other emerging markets as well, but the China flash PMI number was by far the most important to global investors.

Richard Willis, director of Markit Economics, which does these surveys, told the Australian Financial Review that the company had found a new sponsor, but that it wasn’t a bank. “Times have changed and banks are certainly more risk averse these days,” he said.

HSBC has pulled advertising from newspaper in Hong Kong critical of mainland China, and issued an analyst report warning of the dire economic consequences of last year’s “Occupy Central” protests (the protests had little impact on Hong Kong’s economy).

The bank did not answer a question about whether it has been pressured by Beijing to withdraw the sponsorship.