Beijing - China's manufacturing activity came in below initial expectations in September, HSBC said Tuesday, adding to pressure for Beijing to address slowing growth in the world's 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.
But while the closely watched figure, compiled by information services provider Markit and released by HSBC, is unchanged from August and is above the 50-point level that separates growth and contraction, it is below a 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 on Wednesday.
“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 in a release announcing the figure.
Last week's initial result had sparked some optimism that China's 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 indicates growth in the sector still lacks vigour.
“Overall, the data in September suggest that manufacturing activity continues to expand at a slow pace,” Qu said in the release.
“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-September 2012.
China is scheduled to announce third-quarter gross domestic product (GDP) 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.
Furthermore, a slowdown in China's huge property sector, is also weighing on overall growth.
China's new home prices fell in August for the fourth straight month, albeit at a slower pace than in July.
“The revisions made for the HSBC final PMI were in line with our view that growth momentum has continued to lose steam in September,” economists at Nomura said in a report.
“We believe the main drag was the property market correction, which we expect to last into 2015.”
The property sector is a double-edged sword for China.
The government has in recent years introduced measures to temper soaring prices and appease ordinary citizens hoping to own homes.
However, with those measures kicking in and prices beginning to decline local governments - which rely on land sales for much of their income - are looking for a loosening of those restrictions.
China's economic growth target for this year announced in March calls for an expansion of about 7.5 percent, the same objective set last year.
Premier Li Keqiang has stressed repeatedly that authorities are not overly focused on achieving that figure - suggesting actual growth could end up lower - but rather are taking a comprehensive view of the economy's health.
Authorities have “refrained from being distracted by the slight short-term fluctuations of individual indicators”, Li told a World Economic Forum meeting in China earlier in September.
China is attempting to achieve a tricky transformation of its growth model to make consumer spending the main growth driver rather than state-led investment as in the past. - Sapa-AFP