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108680884Manufacturing in China contracted this month, according to the HSBC Purchasing Managers’ Index (PMI), a preliminary reading of manufacturing activity. The figure came in at 49.6. Any number below 50 means activity is shrinking. At about the same time, research firm Markit reported its Flash Eurozone PMI Composite Output Index was at 47.7 for May. These numbers show that the two economies are in recession, although the term applies much differently to China than to the eurozone.

Chinese officials expect its economy to grow at a 7.5% rate this year, based on gross domestic product (GDP). That is extraordinarily low in the context of the double-digit improvement that has marked most of the past decade. Even during the 2008-2009 global downturn, China’s GDP defied gravity.

However, China’s businesses and its huge middle class may have begun to adjust to a new reality, which is one in which an appetite for…

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