One of the few constants in global markets is China's steady flow of contradictory signals. 

In China's economy, there is often bad news.

For example, China's Shanghai Composite stock index dropped 11% last year. By the end of the year, the renminbi plummeted to its lowest levels versus the dollar since June 2008.

And China's explosive real estate market is in bubble territory

But there is also often good news. China's middle class is on a spending spree, using excess income for things such as health insurance and travel. This type of consumption contributes to the overall health of the economy.

Early last year, we highlighted four important figures that get to the bottom of China's economic story. The latest numbers indicate that China's economy is doing just fine.

1. The manufacturing industry in China is growing. The Purchasing Managers' Index is the first key figure. The PMI shows how well China's manufacturing sector is doing.

A reading greater than 50 means that the manufacturing industry is expanding. And a reading lower than 50 indicates that the industry is shrinking.

China is trying to shift its economy to being more consumer-driven. This means that Chinese citizens will need to spend more money on goods and services to drive economic growth.

But China is still the largest manufacturing center in the world, and it is an important driver for the country's economy. So a strong manufacturing PMI measure means that a large part of China's economy is humming along.

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In November, the PMI read 51.7, which was the highest reading since July 2014. This indicates that the country's manufacturing sector is growing.

China's PMI reading briefly dipped below 50 in 2015, but for most of last year it was above or at 50. And it went up from July until November.

Except for a slight downturn recently when it fell to 51.4 last month, China's manufacturing sector appears to be doing well.

2. China's industrial production has stabilized. Another key indicator of China's economic health is industrial production. China's industrial production measures the performance of the manufacturing, mining and utilities sectors, by looking at the change in the value of what they produce. 

China's industrial production growth has finally stabilized, after falling by more than half from 2011 to 2015, as shown below. 

China's industrial production growth will probably never reach 2011's highs again. That kind of growth may be impossible at this stage.

The numbers are just getting too big. But after years of a declining industrial production growth rate, a steady rate is still a good sign for the country's economy. 

2. and 3. China's exports and imports are increasing. Trade data from October showed that both China's exports and imports had increased compared with the year before. This was the first time since October 2014 that both had risen.

Although exports increased only by 0.1%, the modest uptick was better than the expected decline of 5%. And compared with the 7.3% decline in exports for the 12 months ended in October, a small increase is positive.

This was China's first year-over-year increase in exports since June 2015.

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As the black line in the graph above shows, Chinese imports, which is the amount that China buys from other countries, grew more than exports. Compared with the same month a year earlier, the value of goods imported in October was up 6.7%, the fastest growth that Chinese imports have seen since September 2014. 

China's currency, the renminbi, has been declining. It reached an eight-year low against the dollar last month. A weakening currency causes imports to become more expensive.

But Chinese imports continued to grow. This suggests that China's growing middle class is leading growth by spending more of their rising incomes on more imported goods. 

4. Baltic Dry Index is up, too. The performance of China's economy can also be tracked using the BDI. This index tracks the daily pricing of shipping raw materials such as grains and metals by sea.

Shipping prices are driven by supply and demand of the materials that are used to fuel the global economy's demand for things. So in addition to showing what is going on in China's economy, the index can reveal the health of the global economy, too.

Because China is the world's biggest consumer of raw materials, the BDI is a good measure of its economy's health. The country's massive manufacturing sector requires these raw materials.

So a rising BDI can mean that China's manufacturing is growing, too. 

In May 2008, the BDI peaked at more than 11,000. That bubble popped soon after.

In May 2010, the BDI saw another peak above 4,000 and then steadily went down until it bottomed at 290 last February.

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Despite lows in February last year, the index has since recovered. It is unlikely that it will ever reach the heights of May 2008 or even May 2010 again, but it is 225% higher than it was in February.

Nevertheless, a rising BDI indicates that China's and the world's economy are set to grow. 

Notably, China's copper imports rose to 380,000 tons in November. Copper is one of the most important raw materials in the world. 

November's figure was 90,000 tons more than the previous month's. It was the first time that copper saw an uptick since March.

Copper is essential for building, manufacturing and producing. So greater demand for it can mean more growth for China's economy. 

All four key indicators -- an expanding manufacturing sector, growing exports and imports, stable industrial production, and a climbing BDI, suggest that China's economy is looking better. 

If these important indicators continue to look good, China's economy will have a solid platform for growth. And a good foundation bolsters the case for investing in Chinese markets.


To find out more about the best Chinese companies to invest in, and how to do it, click here.

This article is commentary by an independent contributor.

Kim Iskyan is the founder of Truewealth Publishing, an independent investment research company based in Singapore. Click here to sign up to receive the Truewealth Asian Investment Daily in your inbox every day, for free.