Structural changes have been fast pacing in China, pushing considerable changes in world's second largest economy. There is no doubt that China's economy has suffered considerable slowdown, however failing to recognize the changes that has happened, might lead to misreading the turnaround, part of  which is reading the growth numbers right.

Today, series of PMI data, both official and private got released.

According to official reading, manufacturing PMI for November came at 49.6, compared to 49.8 in October. Private reading, Caixin manufacturing PMI reading came at 48.6. Official PMI reading was weakest since 2012

Can we conclude here??.......OK. Chinese economy is still in quite bad shape. Manufacturing is still contracting and at quite a fast pace. So doom gloom is still on.

Doing so, would be same as eating a half-baked cake and it would be grave mistake to ignore another PMI number. That is non-manufacturing PMI, which according to official reading was 53.6 for November, up from 0ctober's 53.1 and best reading since August.

This number is probably more important than the manufacturing PMI.

Why?

Firstly,

Non-manufacturing report covers 1200 companies across 27 industries and one of which is construction.

Secondly,

May be a decade back, looking at this PMI wouldn't make much sense but China has changed a lot since, especially in last few years, service sector has grown enormously in importance. As of 2014, Industry contributes about 36% to overall GDP, whereas services including construction contributes about 55% to overall GDP.

The reforming China, is a story of two PMIs, one (mfg.) which is in decline since 2011 and the other (non-mfg.) which has been growing quite steadily, while gaining in importance.