Main­land China sees man­u­fac­tur­ing in­dex slow more dur­ing July

The China Post - - FRONT PAGE -

Main­land Chi­nese man­u­fac­tur­ing ac­tiv­ity slowed fur­ther in July, of­fi­cial data showed Satur­day, an early sign of weak­ness for the world’s sec­ond- largest econ­omy in the sec­ond half of this year.

The of­fi­cial Pur­chas­ing Man­agers’ In­dex ( PMI) came in at 50.0 last month, the Na­tional Bureau of Sta­tis­tics ( NBS) said in a state­ment.

The read­ing, which tracks ac­tiv­ity in China’s vast fac­tory and work­shop sec­tor, de­cel­er­ated slightly from 50.2 in June.

The in­dex is seen as a key barom­e­ter of the Asian gi­ant’s eco­nomic health, a key driver of global growth. A fig­ure above 50 sig­nals ex­pan­sion in the sec­tor, while any­thing be­low in­di­cates con­trac­tion.

“The de­cline of the of­fi­cial PMI sug­gests the man­u­fac­tur­ing sec­tor re­mained weak,” econ­o­mists from Aus­tralian bank ANZ said in a state­ment.

They pre­dicted that the main­land Chi­nese author­i­ties would fur­ther ease credit in the sec­ond half of 2015 in an at­tempt to shore up growth.

The of­fi­cial re­port showed a bet­ter re­sult than an in­de­pen­dent sur­vey spon­sored by Chi­nese media group Caixin, an­nounced late last month. Its pre­lim­i­nary PMI read­ing for July tum­bled to a 15- month low of 48.2.

Caixin is due to re­lease the fi­nal fig­ure, com­piled by fi­nan­cial in­for­ma­tion ser­vices provider Markit, on Mon­day.

China’s econ­omy, a key driver of global growth, ex­panded 7.4 per­cent last year, the weak­est since 1990, and has slowed fur­ther this year, grow­ing 7.0 per­cent in each of the first two quar­ters.

Author­i­ties, while ac­cept­ing the need to steer China’s growth lower to make it more sus­tain­able, have still taken stim­u­la­tory mea­sures to put a floor on the slow­down.

The cen­tral Peo­ple’s Bank of China in June an­nounced its latest cut in bench­mark in­ter­est rates, the fourth such move since Novem­ber, in a bid to kick- start lend­ing.

It also re­duced for the third time this year the amount of cash banks must keep in re­serve and has taken other steps such as eas­ing mort­gage poli­cies to boost the prop­erty mar­ket.

Adding un­cer­tainty to China’s growth out­look has been a bout of in­tense volatil­ity in the coun­try’s bench­mark Shang­hai stock in­dex that saw it plunge more than 30 per­cent af­ter peak­ing on June 12, forc­ing author­i­ties to im­ple­ment sup­port mea­sures in­clud­ing lim­it­ing stock sales and fund­ing pur­chases.

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