The official purchasing managers’ index (PMI) for March came in at 53.1, higher than expected and the highest monthly measure of factory activity in a year. Yet the flash (preliminary) HSBC PMI for March, which is weighted towards export-dependent small- and medium-sized manufacturers, fell for the fifth consecutive month, to 48.1. Any number below 50 signals contraction; above, expansion. The two numbers reflect the broader division of opinion over to what extent China’s economy is slowing and the likely policy reaction. Weak demand in China’s export markets and the government’s success in cooling the property markets are the main reasons the economy is slowing. With the central bank reiterating that monetary policy will remain “prudent” and inflation falling but still persistent, we still expect government to support manufacturers through measured stimulus spending on transport and infrastructure projects.