China factories hum in shadow of debt risk, Moody’s raises global outlook

BEIJING: China’s industrial engine cranked up again in May, reassuring investors worried about slowing growth in the world’s second-biggest economy as it grappled with debt risks and tried to shake off a stinging ratings downgrade from Moody’s Investors Service.

Moody’s sees an improving global outlook even as it warned of a slowdown in China later in the year as liquidity-tightening measures take effect.

Union exits, although an opinion poll in Britain pointed to the danger of a hung parliament in elections next week.

Moody’s expects 2017 growth for China at 6.6 per cent, in line with the official target of at least 6.5 per cent.

China’s official Purchasing Managers’ Index (PMI) eased worries about a sudden slowdown after a run of weak readings of April data.

The PMI was at 51.2 in May, compared with April’s 51.3 and forecasts of 51.0 in a poll. “The latest official PMI readings add to broader evidence that downward pressure on growth has eased lately,” said Julian Evans-Pritchard, China Economist at Capital Economics.

“Looking ahead, however, we suspect that the current stability... will prove temporary. With the regulatory crackdown on financial risks still weighing on credit growth, it will be difficult to avoid a further slowdown in the coming months.”

Private surveys on factory activity for most Asian economies will be released on Thursday.

Chinese stocks edged higher and the onshore yuan hit a four-month high against the dollar.