It's usually a significant moment when financial markets stop reacting badly to bad news (and by the same token, when they stop reacting well to good news), which makes the reaction of China's financial markets to the latest grim survey data particularly intriguing.
China's benchmark stock index, the CSI 300, rose nearly 3% Tuesday while its currency strengthened against the dollar, despite fresh evidence of falling business activity in the world's second-largest economy.
China's official purchasing managers' index fell to its lowest level in over four years in February, while the Caixin PMI, which surveys generally smaller companies under private ownership, fell to a five month low of 48.0, marking a 12th straight contraction. An index level of 50 typically signals stable levels of activity. Companies laid off staff at the fastest rate since January 2009 and factory gate prices continued to fall.
For most of the last six months, that kind of news has been enough to trigger heavy selling not just in China, but also in the wider world. However, the Chinese central bank on Monday again loosened its monetary policy to support the economy, and speculation is now mounting that a National People's Congress this coming weekend will unveil a new fiscal stimulus.
"The government needs to press ahead with reforms, while adopting moderate stimulus policies and strengthening support of the economy in other ways to prevent it from falling off a cliff," said Caixin's chief econoist He Fan.
Beneath Caixin's headline figure, there was also some tentative indications that the economy may be bottoming out. Inventories of finished goods fell, while output prices fell at their slowest rate in nine months, both pointing to a modest rebalancing of supply and demand.