In the fourth quarter of 2010, all people have to spend more money on

purchasing any kinds of items, including food, clothes, raw materials, etc.
Inflation seems spread in a much faster pace in the globe. A little drop of PMI
index to 53.9 in Dec 2010 further supports inflation does still in effect.

The chart below shows that the exchange rate of CNY to USD keeps on
increasing and reached to a peak value of 0.1505 in October 2010. And there
is a sign of increasing under the pressure from other nations. The undoubtedly
accentuates the inflation problems in Hong Kong.

Most of the data reports higher values in the second quarter of 2010 when
comparing with that of the third quarter in 2009. This includes GDP, interest
rate, macro-economic climate index, business climate index and
entrepreneurs’ confidence index, investment in fixed assets, and the total
volumes of freight and passenger of China. The recovery speed of China
seems so high after the economic crisis happened in 2008.

The increase in the value of GDP reflects that the living standard of China
people becomes higher and people there are willing to spend much money on
travel, which explains the non-stop increasing sign of volumes of passenger
from 2009 to 2010.

In the new year of 2011, people have to find their own ways to resist inflation,
such as transferring money to CNY and keeping more daily-used items at
lower price.

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 Data charts and brief summaries:

Gross Domestic Product

Gross Dome s ti c P roduc t (GDP ) 2009-2010
(GDP) 2009- 2010
400000
Absolute value (100 million yuan)

The importance of secondary

350000
300000 and tertiary industries is
250000 Gross Domestic increasing. Comparing to
Products
200000
Primary Industry previous year, the GDP of third
150000
100000 Secondary
quarter increases 23.34%.
50000 Industry
0 Tertiary Industry
2009 Second Third Fourth 2010 Second Third
First First
Quarter

Manufacturing Purchasing
Managers' Index (PMI Index)
The PMI of China has
continuous decrease from May
to Jul, 2010, it moderates to the
level of 55.2 in Nov, 2010 and
return to the level of 53.9 in
Dec, 2010.

Source: http://www.lifunggroup.com/eng/knowledge/research.php?report=pmi_monthly&version=archive

Interest Rate Spreads

Starting from the beginning of
2010, it has a continuous
decrease in the first half year
of 2010 and moderates to the
level of 2.0% in Nov, 2010.

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 CNY to USD
The exchange rate of CNY to
USD has a sharp increase to
0.1505 at the end of October
and keeps fluctuate at the level
of 0.150 until at the end of
2010.

Source : http://hk.finance.yahoo.com/q/bc?s=CNYUSD=X&t=1y&l=on&z=m&q=l&c

Macro- Economic Climate

Index
The Macro- Economic
Climate Index has an upward
trend after the global
economic crisis in Q1,’09 and
then has decrease in Q1, Q2
and Q3 of 2010.

Business Climate Index and

B u sin ess C limate I n d ex Vs En tr epr en eu r s C o n fid en ce I n d ex Entrepreneurs Confidence
160 Index
140
There has been an increasing
120
Business Climate
trend over quarters in
100
80 Index 2009-2010. The Business
60 Climate Index (BCI) of the third
Entrepreneurs
40 quarter increases 10.85%
Confidence Index
20
Quarter when comparing to Q3,’09.
0
2009 Second Third Fourth 2010 Second Third The Entrepreneurs Confidence
First First
Index (ECI) is slightly higher
than the BCI. In the second
and third quarter, the BCI
reading is slightly higher than
the ECI.

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 Investment in Fixed Assets
2009-2010 (Accumulated
from January)
The accumulated investment
in fixed assets in Nov, 10 is
210697.8 which shows a
24.94% increase when
comparing to the same period
of 2009.

Logistic Index
The Logistic Index keeps
increasing in the year of 2009
and has decrease in the first
and second quarter of 2010.
It has increase at the end of
2010.

Total Volume of
Transportation 2009-2010
Overall, there is an upward
trend in both total volumes of
Freight and Passenger of
China from 2009 to 2010.
However, the total volume of
freight has a slightly drop in
Feb, ’10 while there is an
increasing in the total volume
of passenger transport at the
same month.

Source of data: http://www.stats.gov.cn/enGliSH/

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Disclaimer: Should there be any different views in the interpretation, please always refer to the original media source as

reference. Institute for Supply Management – PRD accepts no liability in respect of the accuracy and truthfulness of the

materials included in this article.

Copyright © 2011 Institute for Supply Management – Pearl River Delta. All rights reserved

Authors: Dr. Jendy LEUNG

Director, Academic & Professional Development of ISM-PRD

Mr. Man Ho LEUNG

Administrative Officer of ISM-PRD

Institute for Supply Management – Pearl River Delta

Operated under Institute for Supply Management Hong Kong (ISMHK)

LG/F., HKPC Building, 78 Tat Chee Ave. Kowloon, Hong Kong.

Tel: + (852) 2854 4292, + (852) 2777 3481

Fax: + (852) 2544 0516

Web site: http://www.ismprd.org/

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