On the face of it, the Chinese economy -- the bedrock of Australia’s continuing economic success -- appears to be lifting out of its torpor. But looks can be deceiving, and many economists believe China’s better economic data might be a classic dead cat bounce. Some economists are forecasting next year’s growth will fall below 7% -- if this is indeed the case, Australian mining stock and the Australian dollar are in trouble.

First, the good news. Second-quarter GDP figures showed growth has picked up from 7.2% in the first quarter to 7.5%. There was more good news last week; the “flash” Purchasing Managers Index released by HSBC -- the first of the PMIs realised each month that measure manufacturing activity -- showed a lift in orders to mark 50.7, up from 50.2, which was the best mark all year. (Anything over 50 means growth, and most PMIs have been in sub-50 territory this year.)