CHINA’S manufacturing activity came in below initial expectations last month, HSBC said yesterday, adding to pressure for Beijing to address slowing growth in the second-largest economy.
The British bank’s final purchasing managers’ index (PMI), which tracks activity in China’s factories and workshops, came in at 50.2 for September.
But while the closely watched figure, compiled by information services provider Markit and released by HSBC, is unchanged from August and remains above the 50-point level that separates growth from contraction, it is below the preliminary reading of 50.5.
August’s figure was down from an 18-month high of 51.7 in July. Beijing’s official PMI for August came in at 51.1, down from 51.7 in July. It will release its September figure today.
“Production increased at the slowest pace in the current four-month sequence of expansion, while job shedding across the sector extended into an 11th successive month,” HSBC said as it announced the figure.
Last week’s initial result had sparked some optimism that the economy, a key driver of global growth, may be showing signs of picking up following a string of weak data recently.
Qu Hongbin, HSBC’s chief economist for China, said the latest reading indicated growth in the sector still lacked vigour.
“Overall, the data in September suggest that manufacturing activity continues to expand at a slow pace,” Qu said. “We think risks to growth are still on the downside and warrant more accommodative monetary as well as fiscal policies.”
China’s economy grew a stronger-than-expected 7.5 percent in the second quarter, up from 7.4 percent in the previous three months, which was the worst since a similar 7.4 percent expansion in July to September 2012. China is scheduled to announce third-quarter gross domestic product figures on October 21.
Authorities have since April introduced a string of measures including targeted infrastructure spending, small business tax breaks and incentives to spur lending in rural areas and to small companies in a bid to boost growth.
But with indicators in August pointing to slowing industrial production, retail sales and fixed asset investment, economists have intensified calls for further measures, arguing that the positive effects of the so-called mini-stimulus are receding. – Sapa-AFP