China’s NBS PMI rose to 50.3 in July compared to 50.1 in June. This reading contrasted with the Markit/HSBC PMI which stood at 47.7 in July, down from 48.2 in June. The latter survey is focused on small and medium sized enterprises, which could be facing more uncertainty in the current context. In any case, the improvement of the NBS PMI was broad-based. Forward looking indicators were somewhat stronger than in previous months. The new orders component edged up to 50.6 in July compared to 50.4 in June, while new export orders increased by 1.3pts to 49 in July. Despite the weaker than expected GDP growth in the first half of the year, only “mini stimulus” measures have been announced. These include reducing taxes on small businesses, simplifying export procedures and funding for railways. Indeed, China’s authorities have chosen to remain on the sidelines and instead are announcing long-term reforms to support the rebalancing strategy and avoid excesses in the financial system. We remain of the view that the economy should regain some traction in the coming months.